Federal Reserves Preferred Inflation Measure Held Steady At 25 In July

The Federal Reserve's Preferred Inflation Measure Held Steady at 2.5% in July

Steady As She Goes: Inflation Holds Steady

The Federal Reserve's preferred inflation measure, the core personal consumption expenditures (PCE) price index, held steady at 2.5% in July, according to data released by the Commerce Department on Friday.

This is the same level as in June and slightly below the Fed's 2% target.

The core PCE price index excludes food and energy prices, which can be volatile.

What it Means for You

The Fed's preferred inflation measure remaining steady at 2.5% is good news for consumers, as it means that prices are not rising too quickly.

However, it is important to note that inflation is still above the Fed's target of 2%. This means that the Fed may continue to raise interest rates in order to bring inflation down to its target.

Higher interest rates can make it more expensive to borrow money, which can slow economic growth.

What to Watch For

It is important to watch the core PCE price index in the coming months to see if it continues to rise or falls.

If it continues to rise, the Fed may be forced to raise interest rates more aggressively, which could slow economic growth.

However, if the core PCE price index falls, the Fed may be able to ease up on interest rate hikes, which would support economic growth.