U.S. Core Inflation Projected to Remain Above Federal Reserve's 2.0% Target in October
The Cleveland Fed’s Inflation Nowcasting model projects that October’s core Personal Consumption Expenditures (PCE) inflation will remain at 3.2% year-over-year, exceeding the Federal Reserve's 2.0% target. This follows a projected headline PCE inflation rate of 3.8% year-over-year for the same month. Both headline and core PCE inflation rates are anticipated to increase further in November. Additionally, the model forecasts that the core Consumer Price Index (CPI) will ease slightly to 2.5% year-over-year in October from 2.6%, but still remain above the target. October would mark the 68th consecutive month of CPI inflation above 2.0% year-over-year. San Francisco Fed President Mary Daly indicated that the Federal Reserve will likely need to tighten policy further, citing a stable but not booming job market and real wages falling behind inflation.
