The US PCE fell month-on-month for the first time in four years in June, and market differences over the Fed's subsequent policy path intensified

According to comparative news, the US PCE price index fell 0.1% month-on-month in June, the first month-on-month decline in four years, and the year-on-year growth rate fell to 3.7%; the core PCE rose 0.1% month-on-month to 3.3% year-on-year, all indicating that inflationary pressure has eased. In the same period, US personal consumption expenditure increased 0.3% month-on-month in June, personal income increased 0.2%, and the savings rate fell to 2.7%, hitting a four-year low.

Despite a cooling in inflation, the Federal Reserve kept interest rates unchanged at the July meeting. The market is clearly divided on the next policy path: J.P. Morgan predicts that the Federal Reserve will raise interest rates by 25 basis points in December, and believes that if inflation continues to heat up, a September rate hike is still possible; Goldman Sachs and Barclays are expected to remain on hold during the year, while Bank of America expects a cumulative total of three interest rate hikes starting in September, while Citi still maintains the expectation that interest rates will be cut continuously in October, December, and January 2027.

According to CME FedWatch data, the probability that market pricing will raise interest rates in September is currently 65.2%, which is down from before the announcement of interest rate negotiation results.