US PCE inflation expected to accelerate

Wall Street Journal survey consensus expects headline PCE inflation of 0.5% month over month, compared with 0.3% previously, and 3.7% year over year, compared with 3.4%. Core PCE inflation is forecast at 0.3% monthly versus 0.2% previously, and 3.1% annually versus 3.0%. Personal income is expected to rise 0.3% and consumer spending 0.6%, following previous increases of 0.2% and 0.9%, respectively. The September results remain unpublished.

Hotter-than-expected PCE inflation could reinforce expectations for additional Fed tightening or higher interest rates for longer, supporting the dollar and Treasury yields while pressuring Nasdaq. Softer inflation could reduce those expectations, potentially weakening the dollar and yields while supporting technology stocks. However, a significant slowdown in consumer spending could raise growth concerns and limit the positive equity market reaction.