Fed’s Favorite Inflation Metric Rebounds: Core PCE Up 2.8% YoY in October

Services prices, up 0.4%, drove October inflation, reflecting a surge in portfolio management fees in line with equity market gains. U.S. personal income for October significantly exceeded expectations. PCE data supports the Fed’s cautious approach to future rate cuts.

While the market still expects a December rate cut, the Nasdaq 100 fell over 1% after the data release. Weekly initial jobless claims stood at 213,000, remaining low, but continuing claims hit their highest level since November 2021.