ChainThink report, August 29, market analyst Matt Grossman stated that the inflation indicator favored by the Federal Reserve did not approach the 2% target level in July, highlighting the policy challenges the Federal Reserve faces as it prepares for a potential rate cut in September. Data from the Bureau of Economic Analysis of the U.S. Department of Commerce showed that the year-over-year growth of the PCE price index in July reached 2.6%, remaining unchanged from the previous month.

The core PCE price index increased by 2.9% year-over-year in July, higher than 2.8% in June. This reading was widely expected, as economists could accurately predict PCE inflation using other official data released earlier this month. Although price increases driven by tariffs continued to remain above the target level, Fed Chair Powell previously indicated that the Fed is considering cutting rates for the first time this year in September, taking into account the cooling labor market. (Jin10)