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

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

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

P2P Foundation founder Michel Bauwens revealed this week that Satoshi wrote him over email in the early days of Bitcoin

article-image

A Blockworks Research report looked at how Hyperliquid has maintained its hype and how it can build out its businesses

article-image

Dragonfly’s Rob Hadick discussed how the firm is approaching investments in the current market

article-image

The asset surged over the past seven days to reach its highest-ever weekly close on the SOL/ETH pair

article-image

Industry watchers note that SOL ETFs have attracted a fraction of the demand for bitcoin and ether ETFs

article-image

Tariff swings impact stock market and company outlooks, with Apple and NVidia likely to be affected by China tariffs