Marketplace Sticky inflation, Fed drama and the rise of 'cute' debt
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Aug 29, 2025 Inflation is stubbornly high, yet consumer spending continues to rise, revealing intriguing economic dynamics. A looming court battle between the White House and the Fed adds a layer of drama to monetary policy discussions. The rise of 'buy now, pay later' services is being cleverly marketed to women, with financial products aimed to feel playful. Meanwhile, job-hopping appears to no longer guarantee higher pay, reflecting changes in the job market. Competitions for top talent in tech echo the dynamics of elite sports, highlighting the importance of teamwork in success.
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Core Inflation Remains Sticky
- Core PCE inflation rose to 2.9% in July, its highest in months and signals stickier inflation than headline measures suggest.
- That persistence complicates the Fed's decision-making on near-term rate cuts.
Consumers Buy Durables Ahead Of Tariffs
- Consumer spending rose in July driven by durable goods like motor vehicles despite falling sentiment.
- Tariff concerns pushed shoppers to buy big-ticket items now to avoid expected future price hikes.
Fed Views Split Over Tariff Inflation
- Fed Governor Christopher Waller believes tariff-driven price rises may be one-offs and supports cutting rates to relieve slowing economic activity.
- Other Fed officials worry inflation could be sticky, so the data leaves rate decisions uncertain.