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

This week on November 1, the Federal Reserve will announce its interest rate decision. There's a 95% probability of keeping the rates unchanged.
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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

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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.

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Varinder Singh

Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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