Goldman Sachs says the PCE inflation data will show the Fed is at its 2% target already

A note from economists at Goldman Sachs on their projections for the next Personal Consumption Expenditures (PCE) report from the US:

• this will be data for September 2024
• scheduled for October 31, 2024

Goldman Sachs forecast a 12-month inflation rate of 2.04%. That would round down to 2%, which is the Fed’s target inflation rate. note that the PCE report will provide updated insights into inflation trends, including both the headline and core PCE price indices. These are which are closely monitored by the Federal Reserve in making monetary policy decisions. Indeed, the PCE report is regularly described as the Fed’s preferred inflation measure.

The only caveat is ‘core’ PCE is expected to be 2.6%. Core inflation excludes food and energy and is a metric that the Fed considers a better measure of longer-term trends. At 2.6% y/y in the PCE report it’d be well below the 3.3% in the CPI report last week.

This article was written by Eamonn Sheridan at www.forexlive.com.