This Inflation Report Puts Pressure on the Fed | S3 E162 | 08-26-26

The July PCE inflation report came in hotter than expected, with the Fed's preferred inflation gauge rising 0.2% month over month against a forecast of just 0.1%. Core PCE now sits at 3.3% year over year, unchanged from the prior month but still well above the Fed's 2% target. Megan breaks down what the data actually shows beneath the headlines.

This matters because the Fed chairman speaks at Jackson Hole this week, and markets are watching closely for any hint of tone on where rates go next. With services inflation still running hot and consumers leaning harder on savings and credit cards, Megan explains why she does not think the Fed has room to sound dovish right now.

In this episode, Megan covers:

- Why July's PCE inflation report ran hotter than economists expected
- Core PCE holding at 3.3% year over year, still far from the Fed's target
- "Super core" services inflation stuck near 3.9% and what that signals for the Fed
- The personal savings rate rising to 3%, still well below the pre-COVID average of 7 to 8%
- Why consumers are digging into savings and using credit cards as prices stay elevated
- What to watch as the Fed chairman speaks at Jackson Hole this week

If you're trying to make sense of what this inflation data means for your money and for the Fed's next move, this one is worth five minutes of your time. Subscribe now.

For a history of all Markets with Megan episodes, visit: https://marketswithmegan.FM

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https://youtu.be/d_e28gvEQlo

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