The Dow Jones (DJIA) is set to open Friday’s trading session higher as investors digest the latest inflation reading.
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August’s Personal Consumption Expenditures (PCE) index notched a monthly rise of 0.3%, in line with the consensus estimate. It rose by 2.7% year-over-year, the highest since February and also in line with the estimate. PCE, which is the Fed’s preferred gauge of inflation, measures the prices of a wide range of goods and services purchased by U.S. households.
Core PCE Matches Estimate as Rate Cut Odds Rise
Core PCE, which excludes volatile food and energy items, increased by 0.2% month-over-month and 2.9% year-over-year. Both figures matched their estimates.
With inflation showing no surprises, the odds of a rate cut at the October 28-29 Federal Open Market Committee (FOMC) meeting have inched higher to 87.7% compared to 85.5% yesterday, according to CME’s FedWatch tool. Last week, the Fed voted 11-1 to cut rates by 25 bps, with Fed Governor Stephen Miran dissenting in favor of a 50 bps reduction.
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