Fed’s Rate Decision Looms Amid Inflation Data and Internal Divisions
The Federal Reserve approaches its next rate decision with sharp internal divisions, as the latest inflation data shows mixed signals. Core PCE rose 0.2% monthly and 2.8% annually, slightly below forecasts, while headline PCE matched expectations at 2.8%. These figures, delayed by the government shutdown, mark the final inflation read before the FOMC meeting.
Markets reacted swiftly, with stocks climbing and futures pricing in near-certainty of a quarter-point cut. Yet the Fed remains split—one faction warns of a weakening labor market, while another fears persistent inflation. The central bank's preferred gauge, CORE PCE, suggests subdued price pressures, but the debate over policy tightening lingers.