Personal Consumption Expenditures (PCE) rose by 0.1% in June, in line with expectations. The notable news is that inflation dropped to 2.5%.

Shelter costs increased by 0.27% in June, which is a significant improvement from the 0.42% rise in May.

Incomes increased by 0.2%, while consumer spending went up by 0.3%. As a result, the savings rate decreased from 3.5% to 3.4%.

Although this report wasn’t as dramatic as anticipated, it still indicates to the Federal Reserve that the economy is stabilizing and inflation is decreasing.

This is promising news for the Federal Reserve to potentially start cutting rates in September. While I may sound repetitive, be prepared for rates to make a significant move into the 5% range in the coming year, which could open the floodgates.

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