Rising inflation has meant that an interest rate hike is believed to be drawing closer in the US. However, on Wednesday evening, the Federal Reserve chose to leave the key interest rate at its current level.
The so-called core inflation now stands at 3.3 percent at an annual rate, compared with 3.4 percent the previous month. Compared with the previous month, the increase was 0.1 percent, lower than both market expectations (0.2 percent) and the previous reading (0.3 percent).
PCE inflation is seen by the US Federal Reserve (Fed) as the most important measure of price increases when making decisions about future policy rates. Unlike the CPI measure of inflation, which is based on a basket of goods, PCE inflation is calculated on what is actually consumed.
Less positive for the country's economy, however, was that GDP growth was slower than expected. In the second quarter, GDP rose by 1.5 percent at an estimated annual rate according to an initial estimate. This was clearly below the 2.1 percent that the market had expected. After yesterday's fall on the New York stock exchanges, futures trading now indicates a recovery, especially for the tech-heavy Nasdaq Composite Index, which rose 1.6 percent.
