Fed’s preferred inflation reading is as expected, but shows prices are sticky 

The Fed’s preferred inflation gauge showed that prices increased 0.2% from September and 2.3% annually

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


The Fed’s preferred inflation gauge rose as expected in October, showing that prices increased 0.2% from September and 2.3% annually. The year-over-year increase is a slight uptick from September’s annual PCE figure of 2.1%. 

Core PCE, which excludes volatile food and energy prices, came in 0.3% higher month over month in October and 2.8% higher annually. It’s the highest annual core PCE reading since April. In the 12 months ended September, core PCE increased 2.7%. 

Odds of a 25-basis point interest rate cut in December increased on Wednesday’s PCE report (coming in at 66.5%, up from 59% on Tuesday). Minutes from the Fed’s last meeting, released Tuesday, showed that committee members are open to easing interest rates at a slower pace if inflation proves persistent. 

Still, some economists anticipate FOMC officials will pump the breaks, opting to hold off on any more cuts this year. 

“We’re still running a bit hot, so the result of that is we’re going to have inflation higher than target,” S&P Global chief economist Paul Gruenwald told Yahoo Finance this morning. “So, the Fed’s going to keep the foot on the break and keep rates higher for longer.”

Today’s PCE report comes as the labor market continues to show strength. Initial jobless claims once again came in lower than expected last week at 213,000, marking the lowest level since April. The figure for the week ended Nov. 16 was upwardly revised from 213,000 to 215,000. 

Fed officials had originally expected to end 2024 25bps lower than where interest rates currently stand. But given these latest data reports, we wouldn’t be shocked if they opted to pause. 

On the other hand, committee members are likely starting to consider how a second Trump term is going to impact the economy, so perhaps they feel more inclined to head into 2025 a bit lower. We’ll have to wait and see.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Strive board member Ben Werkman expects thousands of firms to hold BTC, if only “to protect themselves”

article-image

To date, 12.6 million humans have scanned at a World Orb

article-image

One small step for man, one giant leap for Bitcoin

article-image

Jay Woods, Chief Global Strategist at Freedom Capital Markets, said it would be “very rare” for an acquisition to happen since the IPO may occur as soon as next week

article-image

Sponsored

Money is one of the most consequential pieces of infrastructure, and M0 believes its architecture should serve builders, not extract from them

article-image

The financial backwaters they laughed at might be the only thing keeping the dollar afloat