PCE inflation report: September PCE hits 3.6% as December-hike odds stay near 73%

The September inflation report did not give the Federal Reserve a reason to stop worrying, and markets are pricing the next meeting as if it will decide the question outright. Headline PCE rose 3.6% year over year, a five-month high and an acceleration from August's 3.4%, pushed by a 9.2% jump in energy prices as the Iran conflict kept driving fuel costs higher [2][10]. Core PCE, which strips food and energy, also moved up to 3.1% on the same release, and the FOMC's October 28 statement paired it with the phrase 'inflation remains elevated' and an explicit signal that it is not done tightening [1][12].

Key Takeaways September headline PCE accelerated to 3.6% year over year from 3.4% in August…