Federal Reserve Considers Rate Cut Amid Inflation Data

Inflation across the Eurozone has decreased to its lowest level in three years, falling to 2.2%, prompting expectations of a 0.25 percentage point interest rate cut by the European Central Bank (ECB) on September 12. Meanwhile, the U.S. Federal Reserve is also preparing for a potential interest rate cut, with core inflation expected to rise to 2.7% year-over-year in July, although it remains above the Fed's 2% target. Fed Chair Jerome Powell has expressed growing confidence in controlling inflation, but the central bank is now focusing more on employment risks. The anticipated release of the PCE index could provide crucial insights into the Fed's decision-making and the direction of the U.S. dollar. Analysts predict a 0.2% monthly increase in core PCE inflation, which may signal a shift away from the Fed's restrictive policies. Both central banks are navigating a delicate balance between inflation control and economic stability amid changing inflation trends.