US Core PCE Inflation Slows To 3.7% Raises Hopes of Fed Pivot

The U.S. Bureau of Economic Analysis has released the latest data on personal consumption expenditures (PCE) inflation for September. The annual PCE inflation has met market expectations, remaining at 3.4%, following a slight increase to 3.5% in the previous month.

Furthermore, the annual core PCE, which is the Federal Reserve’s preferred measure of inflation, has come in at 3.7%, showing a decrease from the previous month’s 3.9%. On a month-over-month basis, core PCE has risen to 0.4%, surpassing the anticipated 0.3% and exceeding the previous month’s 0.1%.

Fed’s Interest Rate Decision This Week

This week, on November 1, the Federal Reserve is scheduled to reveal its decision regarding interest rates. According to CME, there is a 94.2% probability that the Fed will opt to maintain the current interest rates and abstain from any rate hikes. Additionally, the United States will release the unemployment rate for the month of October later in the week.

The September PCE inflation data showed that inflationary pressures continue to slowly moderate, but rates are still higher than the Fed’s target of 2%.

 Fed Chair Jerome Powell stated the Fed is proceeding carefully and further tightening of monetary policy depends upon incoming data. The PCE and CPI data indicate that inflation is cooling, but Powell is concerned about the tighter jobs market.

CoinGape Media earlier reported that Wall Street estimates are mostly in line with market consensus in response to the impact on energy prices due to the Israel-Hamas conflict. The markets will remain volatile as traders access mixed earnings results and strong US GDP growth of 4.9%.

In addition, personal spending in the U.S. rose by 0.7% from a month earlier in September 2023. It is a 0.4% increase in August and beating the market consensus of a 0.5% advance.

US stock futures rose on Friday after the market sold off for two straight sessions. Oil price is expected to fall due to easing concerns about the Middle East conflict. Moreover, the U.S. Dollar Index (DXY) remains volatile and moves near 106.52.

Also Read: Standard Chartered-Backed Zodia Markets Receives VASP License In Ireland

Bitcoin and Crypto To Rise As PCE Inflation Slows

Bitcoin and Ethereum will continue to rise as the PCE inflation cools slowly. BTC price mostly moving sideways in low trading volumes. The 24-hour low and high are $33,762 and $34,774, respectively.

Popular trader Skew in a post on X shared that a Fed hike of 25 bps is expected by the end of the year to tame inflation and take a dovish approach.

“PCE release was basically there’s still inflationary pressure within the economy, namely services and wages respectively to labour & spending (goods & services) However trajectory is still towards lower inflation over time (YoY).”

Whereas, ETH price trades near the $1,800 level, with the price trading at $1,795. The 24-hour low and high are $1764 and $1865, respectively.

Traders remain cautious amid the end of the month as Friday’s expiry put some pressure.

Also Read:

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