According to the preferred metric by the Federal Reserve, the personal consumption expenditures price index, the increase on a month-to-month basis is 0.2%, putting the annual inflation rate at 2.3%. These numbers coincide with projections made by Dow Jones, despite the yearly rate outperforming September’s level of 2.1%.
In terms of core inflation, which doesn’t include food and energy, the figures indicated a more robust increase of 0.3% on a month-to-month scale, and an annual reading of 2.8%. These figures also mirrored predictions; the yearly rate was a marginal 0.1 percentage point above the figure from the previous month.
Within the numbers, increased service prices were seen to drive inflation, rising by 0.4% throughout the month. However, this was offset to some degree by a slight downturn in goods prices, which dropped by 0.1%. Energy also saw a minor decrease of 0.1%, while food prices remained generally consistent.
The Federal Reserve maintains an annual inflation goal of 2%; this level has been surpassed by the PCE inflation since March 2021, reaching a zenith of around 7.2% in June 2022. This ongoing trend has led the Fed to increase rates aggressively as a countermeasure.
However, in spite of the uptick in headline inflation, traders are anticipating the Federal Reserve to approve another rate cut in December. The likelihood of a decrease of a quarter percentage point in the Fed’s principal lending rate stood at 66% on Wednesday morning, based on figures from the CME Group’s FedWatch tool.
