Fed Inches Closer to 2 Percent Inflation Target in September PCE Report

‘Reports are consistent with the Fed making another interest rate cut at their post-election decision next week,’ economist Bill Adams said.

A shopper makes her way through a grocery store in Miami on July 12, 2023. Joe Raedle/Getty Images

The personal consumption expenditure (PCE) price index—the Federal Reserve’s preferred inflation gauge—continued to slow in September as the central bank inched closer to reaching its 2 percent inflation target.

The annual PCE inflation rate eased to 2.1 percent last month, down from 2.3 percent in August, according to the Bureau of Economic Analysis. This was the lowest since February 2021. The PCE price index rose by 0.2 percent monthly, up from 0.1 percent in August.