The recent Personal Consumption Expenditures (PCE) report indicates that inflation is gradually moving toward the Federal Reserve's 2% target, with prices rising by 0.2% month-over-month in September, leading to an annual inflation rate of 2.1%. This marks the lowest rate since February 2021, following an upwardly revised rate of 2.3% for August. Core PCE, which excludes food and energy, rose by 0.3% in September, maintaining an annual rate of 2.7%, slightly above analysts' expectations but flat compared to August. Despite these figures, the report did not significantly alter market expectations for interest rate cuts, with a 95% likelihood of a cut in November, although confidence regarding a subsequent cut in December has waned. Overall, Powell likely remains unconcerned about inflation trends as they show a promising decline toward intended targets.

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