The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose a seasonally adjusted 0.2% in July and was up 3.7% year over year, both 0.1% above economists' expectations. Core PCE, which excludes volatile food and energy prices, rose 0.2% month over month and 3.3% year over year, in line with estimates. The hotter-than-expected reading breaks a recent trend of cooling inflation, as the Consumer Price Index came in soft in June and July, and July's jobs report showed a loss of 23,000 nonfarm payrolls versus an expected gain of 85,000. Personal income rose 0.4% and spending rose 0.2%, both higher than expected, potentially fueling inflation. The Federal Reserve is divided on whether to raise rates at its remaining 2026 meetings, with CME Group's FedWatch tool showing a nearly 62% chance of holding rates in September and a roughly 45% chance of a quarter-point hike in December.
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NVIDIA CorporationCME Group IncFedWatch tool shows rate probabilities, directly relevant to CME's futures trading volumes.
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