The recent growth in the economy has led to a decline in the personal consumption expenditures (PCE) price index, reaching 2.1% last month, which is close to the Federal Reserve's desired annual rate of 2%. This development might lead to further rate cuts in the future, according to analysts from Wall Street.
The latest PCE data, which aligns with economists' forecasts, marks a decrease from the previous month, indicating a trend of declining inflation. The Federal Reserve's decision to make its first rate cut in four years is seen as a response to inflation getting closer to the 2% target, providing relief to consumers dealing with credit card debt or seeking loans.
Despite the progress in managing inflation through rate adjustments, consumer dissatisfaction with the high cost of living persists, with upcoming elections placing a spotlight on this issue. While inflation has eased slightly, prices remain elevated, albeit increasing at a slower pace compared to the peak of the pandemic-induced inflation. This discrepancy between perception and official data has led to concerns among voters, with over a quarter of those surveyed believing the current inflation rate is significantly higher than it actually is.