PCE holds at 3.7% in July, keeping rate hike debate alive
The result leaves the Fed in familiar territory. Its benchmark rate has been held in the range of 3.50% to 3.75% since December, and annual inflation has now exceeded the central bank’s 2% target for 65 consecutive months.
Rate decision pressure mounts ahead of Jackson Hole
With the Federal Open Market Committee (FOMC) not scheduled to meet in August, officials convene this week in Jackson Hole, Wyoming, for the Fed’s annual economic symposium. Chair Kevin Warsh, who took office in May, is set to deliver a policy address Friday.
Markets are pricing in roughly a one-in-three probability of a rate move at the September 15–16 meeting, according to market data, with December seen as the more likely window for action.
The stall in inflation’s decline is compounding a rate debate that has already divided the committee. Odeta Kushi, deputy chief economist at First American Financial Corporation in Washington, D.C., captured the prevailing tone in June.
“The more likely story for the second half of the year is volatility around a higher-for-longer range, rather than a meaningful decline in mortgage rates,” Kushi told Mortgage Professional America.
