Economic Update: Inflation, Market Trends

Today, the U.S. Bureau of Economic Analysis will release the September inflation data for personal consumption expenditures (PCE).

The annual PCE inflation is anticipated to reach 3.4%, up from 3.5% last month. The Federal Reserve’s preferred inflation gauge, core PCE, is expected to fall to 3.7% from 3.9% last month. However, monthly core PCE is anticipated to increase from 0.1% to 0.3%.

Recently, Fed Chair Jerome Powell stated that the Fed is proceeding cautiously and that future monetary policy tightening will depend on incoming data.

Powell emphasized the tight labor market but agreed that inflation would gradually decline to its target of 2%. Last month, the Fed left interest rates unchanged at 5.25%–5.55%.

In response to the impact of the Israel-Hamas conflict on energy prices, Wall Street estimates are broadly in line with market consensus.

The markets will continue to be volatile as traders digest inconsistent earnings results and robust US GDP growth of 4.9%.

Futures on US equities rose on Friday after the market had declined for two consecutive sessions.

As concerns about the Middle East conflict diminish, oil prices are anticipated to decrease. In addition, the U.S. Dollar Index (DXY) dropped to 106.56.

As traders book profits in response to Friday’s expiration and the key PCE inflation data, Bitcoin and Ethereum retrace. In the preceding twenty-four hours, the BTC price dropped nearly 2% due to low trading volumes.

The low and high for the past 24 hours are $33,762 and $34,772, respectively.

In contrast, the price of ETH fell below the $1,800 threshold, trading at $1,793. The low and high for the past 24 hours are $1764 and $1865, respectively.

After the Bitcoin ETF hype, however, meme coins are moving the markets. In the last twenty-four hours, FLOKI’s price increased by more than 22%, following Pepe Coin’s two-day rally.