🇺🇸 PCE & US Revenue – September: strong… but still too hot for the Fed
Today's data confirms an economy that remains robust, with inflation that stays sticky.
🔹 Household income: +0.4 %
Stronger than expected → solid wages → sustained consumption.
🔹 Spending: +0.3 %
In line with expectations, with strong support from services.
🔹 Overall PCE: +0.3 % (2.8 % y/y)
Highest in a year → inflation is not retreating.
🔹 Core PCE: +0.2 % (2.8 % y/y)
Stable but still too high to satisfy the Fed.
Macro reading
• inflation is not re-accelerating…
• but it is not decreasing either;
• solid households = persistent pressure on services.
And for the Fed?
This report does not change rate expectations:
The market still prices in an 86 % probability of a cut next week.
👉 The economy is still hot, inflation too high… but no surprise for the Fed and no change in monetary policy expectations.