
Economy grew at a 3.4% annual pace in the third quarter as September inflation rose to 3.6%
CME FedWatch put the odds of a quarter-point Fed rate hike in December at 85%, ABC News reported; this was the last big data release before the Tuesday, Nov. 3 midterms.
- Sept. 22–24 — After the Fed's September hike, its first in three years, Chicago Fed President Austan Goolsbee called reaching 2% inflation "painful"; Governor Michael Barr said more hikes were likely. - Oct. 1 — August PCE inflation came in at 3.4%, below the 3.7% forecast, and October hike odds fell to 35% from 45%. - Oct. 8 — Fed minutes showed 16 of 18 officials projected at least one more hike this year. - Oct. 15–16 — September consumer prices rose 3.7% from a year earlier; producer prices rose 6.3%, the most since December 2022. - Oct. 28 — The Fed held its rate at 3.75%–4% in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting for a hike.
ContextThe Fed aims for 2% inflation on this PCE gauge, so September's 3.6% is nearly double its goal. Core inflation, which strips out food and energy, climbed to 3.1% in September from 3% in August. It had held at 3% since June. At the September hike, the median Fed official expected PCE inflation of 3.7% for 2026 and core of 3.4%. That same median saw inflation back at 2% only in 2029. Its year-end rate forecast, 4.1%, sits one quarter-point hike above today's range.
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