Citigroup notes that US core PCE rose 0.25 percent in August and 3.01 percent year-over-year, below the bank’s forecasts of 0.29 and 3.14 percent, respectively.
Revisions lowered core PCE through July by more than expected. The three-month rate of 2.05 percent is the lowest in around two years, and inflation is clearly below the Fed’s latest forecasts.
Citigroup believes the development will prompt the Fed to hold off on further rate hikes and expects the rate to remain unchanged for the rest of 2026 and into 2027.
