US PCE Price Index (Aug MM) 0.3% vs. Exp. 0.4% (Prev. 0.1%)

On occasions when headline undershoots consensus in this way, the initial repricing has tended to come at the front end of the curve via a nudge to the odds of the next cut, with the dollar softer against the major pairs, before attention shifts to the income and spending detail released alongside it, since strength there has repeatedly offset a benign inflation reading. The distinction worth drawing is between a miss driven by energy or food pass-through, which fades from the policy debate quickly, and one showing up in core services ex-housing, which carries more weight with officials. Given the acceleration from the prior month, the composition will determine whether the disinflation narrative intact before this release survives it. The follow-ons are the core and supercore breakdowns, the revisions to prior months, and how Fed speakers characterise the print in the days after, a pattern that has recurred through stop-start easing cycles.