Fed's Key Inflation Metric Ticks Higher in October, Dampening Rate Cut Hopes

The Federal Reserve's preferred inflation gauge showed renewed upward pressure in October, challenging market expectations for near-term monetary policy easing. The Core Personal Consumption Expenditures (PCE) Price Index, which excludes volatile food and energy components, rose to 2.8% year-over-year, up from September's 2.7%, according to analyst forecasts.

The broader PCE measure, including all consumer spending categories, also edged higher to 2.3% from the previous month's 2.1%. This unexpected acceleration in price pressures has prompted a significant shift in market sentiment, with Fed Funds futures traders now completely pricing out the possibility of a December rate cut.

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