The US Federal Reserve continues to showcase its status as the world's leading financial regulator. The central bank efficiently handles its challenges. Its recent success with inflation is a testament to its resilience. The regulator has not just withstood the surge in consumer prices but has taken proactive measures. The latest data indicates that the US Federal Reserve's battle against inflation is gaining traction. The central bank's favored price growth indicator, the Personal Consumption Expenditures (PCE) index, reported better-than-anticipated figures for August, suggesting progress in containing rising prices. In August, the PCE index, excluding food and energy, rose by a mere 0.1%, falling short of the projected 0.2% increase forecasted by a consensus of Dow Jones economists, as per the US Department of Commerce. On an annual basis, the core PCE growth matched forecasts at 3.9%. These numbers hint at a return to a downward trend after a summer dip, with inflation rates inching higher to 4.2% in July from 4.1% in June. It is expected that the core PCE deflator will climb to 3.9% annually, marking the lowest level since September 2021. Consumer spending also saw an uptick, albeit a modest one, with a 0.4% increase. This is a sharp drop compared to July's 0.9% rise. In real terms, spending increased just 0.1%, down from July's 0.6% growth. Factoring in food and energy, the PCE went up by 0.4% month-on-month and 3.5% year-on-year.
