Fed Expectations

Summary Following today’s PPI release, we are updating our nowcast by +2bps to +34bps m/m and by −1bp to 3.09% for the y/y September core PCE reading (a correction to the 3.12% y/y figure in our earlier email). We maintain our base case that

Summary Month-over-month core PCE came in at +25bps (vs 28bps nowcast) while the year-over-year core PCE reading came in at 3.01% (vs 3.14% nowcast). While headlines noted that today's reading were a downside miss, the month-over-month core PCE reading was

In 2026, the Fed moved from an easing bias to a hold to a hike, catching up to the data with a lag at every stage. We look back at how (1) a bottoms-up read of inflation, (2) a careful reading of the labor market, and (3) close tracking of the full FOMC put us ahead of the hawkish turn.