United States Bureau of Economic Analysis reported that the Personal consumption expenditures (PCE) price index, excluding food and energy, jumped 5.1% in September on an annual basis, going above estimates. The stubborn reading of the index, which is the Federal Reserve’s preferred inflation gauge, is upholding the case for further interest rate hikes by the central bank. Such a scenario seemingly diverted the attention away from gold, which is non-interest-bearing.
Core Deflator — stripping out volatile food and energy prices — reached +0.5%, in-line with expectations but only 10 bps off cycle highs in June. Year over year Core Deflator was up 20 bps to +5.1%, though still off cycle highs of +5.4% registered in February, which was the highest print since 1983. Headline Deflator year over year was +6.2%, a miniscul 10 bps lower than expected. NN: THis is NOT what the FED wanted to see on the key inflation indicator they track That means a taper is off the table. .The Fed will continue to slam on the breaks.