US September PCE Inflation Data Shows Moderation, But Still Above Target
The US Bureau of Economic Analysis has released the personal consumption expenditures (PCE) inflation data for September. The annual PCE inflation rate remains at 3.4%, in line with market forecasts. However, the core PCE, which is the Federal Reserve’s preferred measure of inflation, falls to 3.7% from 3.9% last month. On a monthly basis, core PCE rises to 0.4%, higher than the expected 0.3% and last month’s 0.1%.
Inflationary Pressures Continue, Fed Chair Concerned About Tighter Jobs Market
The September PCE inflation data indicates that inflationary pressures are slowly moderating but still above the Fed’s target of 2%. Federal Reserve Chair Jerome Powell has stated that the central bank will proceed carefully with monetary policy tightening, depending on incoming data. While inflation is cooling, Powell is concerned about the tighter jobs market.
Wall Street Estimates Mostly in Line with Market Consensus
Wall Street estimates are mostly in line with market consensus regarding the impact of energy prices due to the Israel-Hamas conflict. Traders can expect volatility in the markets as they assess mixed earnings results and strong US GDP growth of 4.9%.
Personal Spending Rises in September
Personal spending in the US increased by 0.7% in September compared to the previous month, surpassing market expectations of a 0.5% advance. This marks a significant improvement from August’s 0.4% increase.
US Stock Futures Rise Amid Easing Middle East Concerns
US stock futures have risen after two consecutive sessions of selling. Easing concerns about the Middle East conflict are expected to lead to a fall in oil prices. The US Dollar Index remains volatile, hovering around 106.52.
Bitcoin and Crypto Expected to Rise as PCE Inflation Slows
Bitcoin and Ethereum are anticipated to continue rising as PCE inflation cools slowly. Bitcoin’s price has been mostly moving sideways with low trading volumes, while Ethereum’s price trades near the $1,800 level. Traders should remain cautious due to end-of-month pressures.
Hot Take: Inflation Moderating, But Fed Remains Cautious
The latest PCE inflation data shows that inflationary pressures are slowly moderating, but they still remain above the Federal Reserve’s target of 2%. While the data indicates some improvement, Fed Chair Jerome Powell remains cautious about tightening monetary policy due to concerns about the tighter jobs market. Wall Street estimates are in line with market consensus, and personal spending in the US has risen in September. Despite these positive signs, traders should stay vigilant amid volatility in the markets. Bitcoin and crypto are expected to rise as PCE inflation slows down.
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