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Fed's preferred inflation gauge shows further signs of cooling in October

Josh Schafer·Reporter
Thu, November 30, 2023 at 2:32 PM GMT+1

Inflation continued to cool in October.

The Personal Consumption Expenditures (PCE) Index grew 3% year over year for the month, down from 3.4% in September and with expectations. "Core" PCE, which excludes the volatile food and energy categories, grew 3.5%, down from 3.7% from the month prior and in line with what economists surveyed by Bloomberg had expected.

Month-over-month, core PCE rose 0.2% in October, down from 0.3% in September.

Core PCE is the inflation measure most often mentioned by Fed Chair Jerome Powell and therefore is watched closely by investors. Ahead of the print's release, markets had upped bets that the Fed was likely done hiking interest rates.

As of Wednesday, markets were pricing in a 78% chance of an interest rate cut by the end of the Fed's May meeting. A month ago, markets had priced just a 41% chance of a cut in the same time period, per the CME FedWatch Tool.

https://finance.yahoo.com/news/feds-pref...30739.html