The dollar index climbed above 98 on Friday as persistent price pressures highlighted the Fed’s challenge in easing rates amid a weakening jobs market. The core PCE price index rose 0.3% in July, up 2.9% year-on-year, the fastest since February. Consumer spending grew at its strongest pace in four months. Late Thursday, Fed Governor Waller signaled support for a cut in September, with more possible over the next 3–6 months if employment weakens and inflation remains contained. The Fed has held rates steady in 2025 due to tariff-driven inflation risks, but recent soft jobs data and Powell’s comments suggest a rate cut could be justified. Despite recent gains, the dollar is on track for a nearly 2% drop in August as markets price in expected easing at the Sept. 16–17 meeting.