"US Dollar Slips as Traders Take Profit Amid Falling Core Inflation and Risk-Off Sentiment"

The US dollar dipped as the market focused on falling core inflation indicated by the latest PCE report, which showed strong spending numbers but a decrease in core and headline inflation. The Federal Reserve's attention is on the shorter-term inflation numbers, which fell to 1.9% and 1.5% for 6-month and 3-month annualized rates, respectively. This raises questions about potential rate cuts despite a solid economy, with the possibility of recalibrating rates from 5.50% back into the 4% range to allow room for future cuts if needed. The market is currently lightly selling the US dollar as yields return to pre-PCE levels, while S&P 500 futures remain flat.