Markets monitored the September US PCE inflation report, which showed core annual inflation rising to 3.1% from a previous 3.0%. The result met expectations but indicated an acceleration in price pressures, leading traders to price in an 84% probability of a 25 bps Fed rate hike in December. Fed Chair Kevin Warsh noted that upcoming economic data will determine the future path of monetary policy, suggesting that persistent pressures could support patience regarding rate cuts.
The monthly pickup in prices coincided with a halt in real spending growth and a decline in real disposable income, as the Federal Reserve left interest rates unchanged in a split decision.
Read the full storyPersonal consumption expenditures forecasts point to faster headline and core inflation, while the Federal Reserve held rates unchanged with two members dissenting.