September economic data in the United States reveals a reduction in the core personal consumption expenditure (PCE) index,
which excludes food and energy prices. The core PCE went from 3.8% to 3.7%, a level that draws the attention of the Federal Reserve (FED) , the US central bank , which aims to maintain inflation at around 2% . Total personal spending increased by $175.1 billion, and the personal savings rate was 3.4%.
Although the numbers are within projections, core PCE is well above the FED 's inflation target. This data could signal stronger-than-expected inflationary pressures , raising questions about future monetary policy.
With the next FED meeting in sight, my perspective is that the current core PCE index may indicate that the FED will not raise interest rates next week. This expectation, in turn, could result in an optimistic day for stock markets, which have been suffering losses in recent weeks.