The Federal Reserve is preparing to make a crucial interest rate decision at its September 15-16 meeting, with markets pricing in roughly 90% odds of a rate hike. The Bureau of Economic Analysis will release on September 30 a major revision to national accounts that could lower core PCE inflation readings by 0.1 to 0.2 percentage points. These methodological revisions, dating back to 2021, will improve inflation measurement in technology and service sectors. Goldman Sachs and JPMorgan estimate that May 2026 core PCE could fall from 3.4% to a range of 3.2% to 3.3%. The situation has divided the Fed between officials concerned about a cooling labor market and those insisting on action while inflation remains above the 2% target.
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