Operational Excellence (OPEX) Daily Briefing – Friday, August 29, 2025: U.S. Inflation Holds at 2.9%: A Lesson from Control Charts – Don’t Overreact to Normal Fluctuations

U.S. Inflation Holds at 2.9%: A Lesson from Control Charts – Don’t Overreact to Normal Fluctuations

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News Recap:

  • Today, global financial markets closely watched the U.S. Personal Consumption Expenditures (PCE) report, the Federal Reserve’s (FED) preferred measure of inflation when deciding on interest rates.

    • Core PCE (excluding food and energy) rose 2.9% year-over-year in July 2025, exactly in line with market expectations and slightly above 2.8% in June [Reuters].

    • Headline PCE increased 2.6% YoY, steady compared to the previous month [Investors].

    • On a monthly basis, PCE rose 0.2%, while core PCE gained 0.3% [Investors].

    • At the same time, personal income grew 0.4% and personal spending rose 0.5% in July, signaling consumer demand remains strong [Reuters].

    In this context, markets are now almost certain that the FED will cut interest rates in September. But through the lens of Operational Excellence (OPEX), the real takeaway is this: knowing how to distinguish between normal variation and unusual signals—and responding accordingly.

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