EL7.AI
Macro EconomyMedium•30 September 2026•
1 min read

Softer US Inflation Data Supports Fed's Patient Rate Stance

Key Facts

1US inflation data came in cooler than feared, supporting NY Fed President John Williams' view that there is no immediate rush to hike rates.
2Revisions to household income and spending data suggest the US economy is in a better balanced position than previously thought.

US inflation data for September 2026 arrived softer than market expectations, supporting New York Fed President John Williams' assertion that there is no immediate rush to hike interest rates. ING reported that the core PCE deflator, the Fed's preferred inflation gauge, rose 0.2% month-on-month in August, while the annual core inflation rate came in at 3%, lower than the 3.3% consensus forecast.

Revisions to household income and spending data suggest the US economy is in a better balanced position than previously thought, with real spending growth firm at 0.6% month-on-month. According to ING, the data led to a shift in market pricing, with only 9 basis points now priced in for the October FOMC meeting compared to 18 basis points previously.