Finance

The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures price index, decelerated more than anticipated for August, with core PCE easing to an annual rate of 3.0%. Despite this encouraging sign of moderating price pressures, long-term Treasury yields refused to budge from near-historic highs. Analysts noted that while the data reduces the immediate probability of an October interest rate hike, annual figures remain comfortably above the central bank's long-term target.

Long-term U.S. government bond yields extended their upward trajectory, maintaining extreme pressure across financial markets. The benchmark 10-year Treasury yield surged to 5.29%, while the 30-year bond yield hovered at its highest levels since 2002. Persistent geopolitical tensions and high government spending outlays continue to draw capital away from equities and challenge broader market sentiment.

The final reading of the U.S. gross domestic product for the second quarter of 2026 was upgraded to an annualized growth rate of 2.2%. This revision reflects a more robust pace of economic expansion than the previously estimated 1.5% increase. The data confirms underlying economic strength and resilient consumer spending, giving the Federal Reserve more flexibility in managing ongoing macroeconomic risks.