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Cooling Core Inflation Boosts Odds of Fed Rate Cut to 87% Amid Diverging Policy Views
The latest inflation data from the U.S. Department of Commerce, though delayed due to a previous government shutdown, has delivered a pivotal signal to markets. The core Personal Consumption Expenditures (PCE) price index excluding food and energy rose just 0.2% in September and 2.8% year-over-year. The annual figure was 0.1 percentage point lower than expected and down from 2.9% in August. This modest decline in the Fed's preferred inflation gauge introduces a direct causal mechanism supporting monetary easing. Lower-than-expected inflation provides greater flexibility for the Federal Reserve to cut interest rates ... (full story)