U.S. July PCE inflation stays elevated at 3.7%; Q2 GDP growth confirmed at 1.5%
AI Market Summary
July PCE inflation held at 3.7%, above expectations, while Q2 real GDP stayed at a modest 1.5%, reinforcing a sticky-inflation/slow-growth mix. The Iran war is cited as stalling disinflation via energy-linked pressures, and the collapse of U.S.-Canada trade talks raises tariff-driven inflation risks. Together, the data and geopolitics increase policy uncertainty and keep rate expectations skewed higher, supporting USD sensitivity.
Impact level
● High
Affected assets
NCSIDXY2USD/USDT+0.27%
AI Insight · NCSIDXY2USD/USDTAI Insight
▼ Bearish
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Data from the U.S. Bureau of Economic Analysis (BEA) showed the PCE price index rose 3.7% year over year in July, unchanged from June and slightly above the 3.6% consensus estimate, according to ChainThink. Inflation has now run above the Federal Reserve's 2% target for 65 straight months.
The BEA also confirmed real GDP grew at an annualized 1.5% in the second quarter, matching the agency's prior revision.
ChainThink noted that the recent cooling in inflation from previously high levels has stalled amid the war in Iran, a development that could sharpen debate within the Fed over whether to raise interest rates or keep policy steady. In trade, U.S.-Canada talks broke down on Friday, increasing the risk of fresh inflation pressure from potential new tariffs.
