Post #2957

Is Inflation Heating Up Again? And Why Is the Fed Still Comfortable Cutting Rates? September’s data sent mixed signals, Headline - PCE climbed to 2.8%, its highest in almost a year. While core PCE, the one the Fed actually focuses on slipped to 2.8% instead of rising to 2.9%. So on the surface, inflation looks hotter… but underneath, it’s still cooling. That’s exactly why the Fed can continue with rate cuts. They don’t judge policy on one month of noise, they look at the broader direction. And right now, the direction shows core inflation steadily moving lower and economic momentum slowing just enough to reduce price pressures. Inflation expectations are still stable which gives the Fed even more confidence to shift its focus toward supporting growth rather than tightening further.