U.S. headline prices may have cooled sharply, but core inflation remained near 3.3% through the summer, keeping pressure on the Federal Reserve’s policy path. Data cited by Techub show that core personal consumption expenditures, or core PCE, has stayed above the Fed’s 2% target for 65 straight months. That persistence is being read as a sign that inflation pressure is broader than energy alone.
The report said the Federal Open Market Committee, led by Kevin Warsh, raised interest rates by 25 basis points on Sept. 16. It also cited analysis arguing that entrenched inflation usually requires a longer tightening cycle rather than a one-off move. Macro strategist Jim Bianco said the market may be paying too much attention to oil prices while missing wider inflation across the economy. If inflation continues to force the Fed’s hand, the stock rally built on expectations of easier monetary policy could face a tougher test.
U.S. prices have cooled overall, but core inflation stayed near 3.3% throughout the summer, according to data cited by Techub News. The report said core personal consumption expenditures, or core PCE, has remained above the Federal Reserve’s 2% target for 65 consecutive months.
The Federal Open Market Committee, or FOMC, led by Kevin Warsh, raised rates by 25 basis points on Sept. 16. The report added that stubborn inflation typically takes a longer hiking cycle to resolve, rather than a single move.
Macro strategist Jim Bianco said persistently elevated core PCE suggests the market is focusing too heavily on oil prices while overlooking broader inflation across the economy. If inflation pressure continues to push the Fed into action, the stock market rally tied to expectations for easier monetary policy could be tested, the report said.
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