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Core PCE Inflation Cools in September, Clearing Path for Fed Rate Cut Next Week
Summary: According to sources, the inflation indicator favored by the Fed remained below 3% in September, with moderate monthly price increases, which may not hinder the Fed from considering a rate cut at next week's meeting. The US Commerce Department reported on Friday that the September PCE price index rose by 0.3% monthly, pushing the annual ...
According to sources, the inflation indicator favored by the Fed remained below 3% in September, with moderate monthly price increases, which may not hinder the Fed from considering a rate cut at next week's meeting. The US Commerce Department reported on Friday that the September PCE price index rose by 0.3% monthly, pushing the annual rate up slightly from 2.7% in August to 2.8%. The core PCE annual rate, excluding volatile food and energy prices, dropped from 2.9% in August to 2.8%.
The monthly price increase aligns closely with Wall Street's predictions. Normally, the Fed would have a full picture of October inflation and November employment before convening its final meeting of the year.
However, the government shutdown delayed the release of this data, leaving the Fed to rely on outdated official economic indicators to weigh its next steps. At next week's meeting, Fed officials will discuss how to strike a balance between high inflation and cooling labor market, a challenging dynamic that threatens both of the Fed's dual mandates.
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Link: Core PCE Inflation Cools in September, Clearing Path for Fed Rate Cut Next Week [Copy]
