This morning, U.S. index futures showed a mixed but generally positive trend.
The Personal Consumption Expenditures (PCE) Price Index data released this morning for August 2025 showed the following:
The overall PCE Price Index increased by 0.3% month-over-month, slightly up from a 0.2% rise in July, in line with economists’ expectations.
Over the 12 months through August, PCE inflation rose 2.7%, up from 2.6% in July.
The core PCE Price Index, which excludes volatile food and energy prices and is the Federal Reserve’s preferred inflation gauge, rose 0.2% month-over-month, consistent with forecasts, and remained unchanged at 2.9% on a year-over-year basis.
Personal income rose 0.4% for the month, and personal consumption expenditures (real spending) increased as well, indicating continued consumer activity.
The latest income and spending figures surpassed expectations, reflecting stronger-than-anticipated consumer activity, while inflation readings aligned with consensus forecasts. Such data is likely to be received positively by the market. With the Federal Reserve signaling a potential path toward interest rate cuts, and Chair Powell consistently emphasizing that the current policy stance is not directly contingent on meeting the inflation target, investors are gaining confidence in a more accommodative monetary environment moving forward. This combination of robust income and spending data alongside stable inflation metrics supports the market’s optimistic outlook amid ongoing monetary policy considerations.
The Supreme Court is set to determine the legality of President Trump’s attempt to remove a Federal Reserve board member.
A bipartisan group of former Federal Reserve chairs, Treasury secretaries, and leading economists sent a letter to the U.S. Supreme Court urging it to block President Donald Trump’s attempt to fire Federal Reserve Governor Lisa Cook.
This situation underscores the reality that the Federal Reserve’s resistance to political pressure will not be a brief or straightforward contest for either side.