Core PCE inflation cooled in September, paving the way for a Fed rate cut next week.

According to Mars Finance, on December 5th, the inflation gauge favored by the Federal Reserve remained below 3% in September, indicating a moderate monthly price increase, which may not prevent the Fed from considering an interest rate cut at its meeting next week. The U.S. Commerce Department said on Friday that the PCE price index rose 0.3% month-on-month in September, bringing the annual rate up slightly to 2.8% from 2.7% in August. The core PCE annual rate, excluding volatile food and energy prices, fell to 2.8% from 2.9% in August. The monthly price increase was largely in line with Wall Street's forecasts. Under normal circumstances, the Fed would have a comprehensive understanding of October's inflation and November's employment situation before its final meeting of the year. However, the government shutdown delayed the release of this data, forcing the Fed to weigh its next steps against a set of outdated official economic indicators. At next week's meeting, Fed officials will discuss how to balance high inflation with a cooling labor market, a challenging dynamic that threatens both of the Fed's objectives. (Jinshi)