Truflation calls for Fed rate cut after PCE forecast

Truflation has called for the Federal Reserve to cut interest rates after its July forecast came within 0.01 percentage point of the official monthly headline PCE reading and matched the other three published figures. Summary Headline PCE rose 0.2% monthly and remained at 3.7% annually in July. Truflation forecast the published readings five days before the BEA released its report. Oliver Rust said weaker spending, lower gasoline prices, and mixed labor data support a rate cut. Fed officials remain concerned about inflation as services, wages, and tariffs keep pressure on prices. The U.S. Bureau of Economic Analysis reported on Aug. 26 that the PCE Price Index rose 0.2% month over month in July, reversing a 0.1% decline recorded in June. Annual headline inflation remained unchanged at 3.7%. Core PCE, which excludes food and energy, also increased by 0.2% on a monthly basis and held at 3.3% from a year earlier. The Federal Reserve uses PCE as its preferred measure of inflation and has set a long-term inflation target of 2%. Five days before the government release, Truflation estimated that headline PCE would increase 0.19% monthly and stay at 3.7% annually. Its forecast placed month...