📊 Has inflation returned to rise? And why will the Fed continue to lower interest rates?

• The inflation data for September showed a strange mix:

• The main PCE index rose to 2.8%, the highest reading since October 2023.

• Core PCE inflation dipped slightly to 2.8% compared to expectations of 2.9%.

🔹 Analysis:

• “Apparent” inflation rose, but the Fed is focusing on core inflation, which is on a continuous downward path.

• Economic activity has begun to show moderate slowing, which reduces the risk of a renewed inflation flare-up.

Why will the Fed continue to lower interest rates?

• The decision does not depend on one month, but on the overall trend of inflation and economic growth.

• The Fed prefers to support growth and ease financial tightening rather than insist on pressure for further inflation reduction, especially with medium-term inflation expectations stable (2–2.5%).

⚠️ Summary:

• Rise in main inflation = Yellow light 🚦

• Continued decline in core inflation = Green light ✅

→ Therefore, interest rates will continue to be lowered, but with great caution.