After the latest PCE release, traders tracked by CME FedWatch now see a 52.9% probability that the Federal Reserve will leave rates unchanged through October, with a 47.1% chance of a cumulative 25-basis-point hike by that meeting. The December path remains more tilted toward additional tightening: the probability of no change stands at 10%, while the odds of a cumulative 25-basis-point increase are 51.8%, and the odds of a cumulative 50-basis-point increase are 38.2%.
The update followed earlier U.S. inflation data showing the August core Personal Consumption Expenditures price index at 3% year over year, below the 3.3% expectation and the lowest level in six months. The previous reading was revised from 3.30% to 3%. The figures were cited by BlockBeats on Sept. 30, referencing CME FedWatch.
BlockBeats reported on Sept. 30, citing CME FedWatch, that after the PCE data release, the probability of the Federal Reserve keeping rates unchanged through October stood at 52.9%. The probability of a cumulative 25-basis-point rate hike by then was 47.1%.
December rate path probabilities
For December, CME FedWatch showed a 10% probability that the Fed will keep rates unchanged. The probability of a cumulative 25-basis-point hike was 51.8%, while the probability of a cumulative 50-basis-point increase was 38.2%.
Earlier core PCE reading
Earlier reports showed that the U.S. core Personal Consumption Expenditures price index for August rose 3% year over year, below the 3.3% forecast and the lowest level in six months. The previous reading was revised from 3.30% to 3%.
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