August core personal consumption expenditures prices rose 3.0% from a year earlier, below the 3.3% forecast but unchanged from July’s revised rate. The monthly increase was 0.247%, rounding to 0.2%. Downward revisions to earlier months accounted for most of the annual surprise, with the Bureau of Economic Analysis changing how it measures investment advisory services, software and legal services. Williams said Tuesday that “there is no need for urgency” after September’s rate increase, while leaving open another increase late this year.
Treasury yields erased their initial declines after the inflation report and turned higher. The 30 year yield reached 5.64%, its highest since 2002, while the 10 year yield rose to 5.30%. Other economic figures showed stronger demand: inflation-adjusted consumer spending increased 0.6% in August, its biggest monthly gain since March 2025, and second-quarter GDP growth was revised to a 2.2% annual rate from 1.5%.