US Core PCE Holds Steady Near 2.9% Annual Pace in Recent Readings

August 2025 core PCE rose 0.2% monthly with the annual rate at 2.9%, in line with forecasts and Fed expectations.

Recent PCE data releases have shown core inflation stabilizing around the 2.9% annual mark, providing the Federal Reserve with continued evidence that price pressures are moderating but not yet at the 2% target. The Commerce Department reported a 0.2% monthly increase in the core index alongside a 0.3% headline gain, matching economist consensus and following similar patterns in prior months. This stability occurs against a backdrop of solid consumer spending, which has supported economic resilience even as GDP growth has shown signs of softening in earlier quarters. For markets, the in-line print reduces the likelihood of aggressive rate hikes and keeps expectations anchored for gradual easing later in the cycle. Equity markets, particularly cyclical sectors like consumer discretionary and industrials, could benefit from sustained spending momentum, while bond markets may see limited yield upside. Traders should monitor upcoming CPI cross-checks and Fed speeches for any shifts in the reaction function, especially if core readings begin to reaccelerate due to energy or housing components. The data reinforces a neutral-to-slightly-dovish tilt for rate-sensitive assets in the short term.