September Core PCE Inflation Cools, Setting the Stage for Fed Rate Cut Next Week
BlockBeats News, December 5th, the Fed's favored inflation gauge stayed below 3% in September and showed a moderate monthly price increase, which may not hinder the Fed's consideration of a rate cut at the meeting next week. The U.S. Commerce Department said on Friday that the September PCE price index rose by 0.3% on a monthly basis, pushing the annual rate up slightly from 2.7% in August to 2.8%. The core PCE annual rate, excluding the more volatile food and energy prices, fell from 2.9% in August to 2.8%.
The monthly price increase was broadly in line with Wall Street's expectations. Normally, the Fed would have a full picture of October inflation and November employment before holding its final meeting of the year.
However, the government shutdown delayed the release of this data, leaving the Fed to weigh its next move based on a set of outdated official economic indicators. At next week's meeting, Fed officials will discuss how to strike a balance between soaring inflation and a cooling labor market, a challenging dynamic that poses a threat to both of the Fed's dual mandates. (FXStreet)
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