Scott Bessents inflation objective is a big endeavor, economist says
Former J.P. Morgan Chase chief economist Anthony Chan discusses Treasury Secretary Scott Bessents prediction of a sharp drop in inflation on Varney & Co.
The Federal Reserve's preferred inflation gauge showed that inflationary pressures remained elevated in August, as policymakers seek to balance the need to restore price stability against a weakening labor market following last week's interest rate cut.
The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index rose 0.3% in August from a month ago and is up 2.7% from last year. Those figures were in line with the estimate of LSEG economists.
Core PCE, which excludes volatile measurements of food and energy prices, was up 0.2% on a monthly basis and 2.9% year-over-year. Both were in line with economists' expectations.
Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Headline PCE ticked higher from 2.6% in July to 2.7% in August, while core PCE held steady at 2.9% over that period.
WHAT IS THE FED'S OUTLOOK FOR INTEREST RATE CUTS, INFLATION AND JOBS FOR THE REMAINDER OF THE YEAR?
Prices for goods were up 0.9% in August from a year ago, an acceleration from the 0.6% readings in both June and July. Durable goods prices were 1.2% higher in August compared with last year, while nondurable goods rose 1.2% in that period.
Services prices were up 3.6% in August compared with a year ago, which was slightly higher than the 3.5% reading in July.
FED CUTS INTEREST RATES FOR FIRST TIME THIS YEAR AMID WEAKENING LABOR MARKET
The personal savings rate as a percentage of disposable personal income was 4.6% in August, down slightly from a 4.8% reading in the prior month.
This is a developing story. Please check back for updates.
