Fed may raise rates in October after PCE comes in higher than expected
MacroDigital Finance
Investors are increasing their bets that the Fed will raise interest rates in October after the headline PCE index came in higher than expected. The CME Group's FedWatch Tool shows investors assign a 54.7% probability that the Fed will raise rates by at least 25 basis points at its October meeting, up from 46.4% the previous week. Meanwhile, the probability of holding rates at 3.50%-3.75% fell to 45.3% from 53.6%. The U.S. Commerce Department reported that headline PCE rose 3.7% year-over-year in July, above the expected 3.6%, and rose 0.2% month-over-month, above the expected 0.1%. Core PCE rose 3.3% year-over-year and 0.2% month-over-month, in line with expectations.
