US Core PCE Rises 3.0% in August

U.S. inflation pressure turned out to be milder than expected. The U.S. Commerce Department said Friday (local time) that the personal consumption expenditures (PCE) price index rose 3.4% in August from a year earlier. The figure was below the 3.7% economists had forecast, while the 0.3% rise from the previous month was in line with expectations. The core PCE price index, which excludes energy and food, rose 3.0% from a year earlier and 0.2% from the previous month in August.

The PCE price index is an inflation gauge that reflects the prices of goods and services households consume, and the Federal Reserve uses it as its benchmark when judging whether it has achieved its 2% inflation target. PCE shows how much prices have risen when consumers spend money. Although the core PCE rate remains above the Fed's 2% target, it is showing a downward trend.

As inflation slowed more than expected, easing concerns over additional Fed rate hikes, U.S. Treasury yields are facing downward pressure.