US August Core PCE Below Expectations, Fed October Rate Hike Bets Cool

BlockBeats news, September 30th - The U.S. August core PCE price index rose 3% year-over-year, hitting a new low since February, below the market expectation of 3.3%, with the previous value revised from 3.3% to 3%; it rose 0.2% month-over-month, also below the expected 0.3%. The overall PCE rose 3.4% year-over-year and 0.3% month-over-month, both below market expectations.

During the same period, U.S. personal spending in August increased 0.9% month-over-month, higher than the expected 0.8%; real personal spending, adjusted for inflation, grew 0.6%, the largest single-month increase since March 2025. The simultaneous occurrence of below-expectation inflation and resilient consumption has increased the complexity for the Federal Reserve in judging its subsequent policy path.

Following the data release, U.S. short-term interest rate futures rose, and traders reduced bets on a Federal Reserve rate hike in October. CME's "FedWatch" shows the probability of keeping rates unchanged in October is now 52.9%. The U.S. two-year Treasury yield briefly fell more than 5 basis points to 4.843%, and spot gold rose more than $20, standing above $4,210. The BEA also adjusted the calculation methods for some PCE components this time, and it is currently unclear how much impact the related revisions had on the final data.