CPI and PPI Frame PCE Outlook: Oxford Economics Sees 3.8% October Inflation and Firmer Fed Hike Bets

According to Jin10, the release of the CPI and PPI reports allows economists to submit forecasts for the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index. Oxford Economics said in a report that rising headline prices would push annual PCE inflation to 3.8% in October, up from 3.6% in September. Although Friday’s PPI data came in slightly below analysts’ expectations, elevated price pressures strengthened market participants’ expectations of a rate hike at the Fed’s next meeting.