The core PCE data is out, and it's looking good! First off, the most important core PCE year-over-year rate came in much lower than market expectations, only 3%. This indicates that core inflation in the U.S. actually declined in August, giving the market a bit of relief. The probability of the Fed raising rates in October should now be slightly lower. But that's just for now—the key focus will still be on the CPI data released in October and changes in oil prices during October. At least for now, September is already behind us, and inflation in September is very likely to be higher than in August. The CPI data probably won't look good, which will likely increase the chances of a Fed rate hike. However, if the Hormuz issue can be resolved quickly in October, the market might anticipate lower oil prices leading to a decline in inflation, thereby reducing inflation expectations. Oh, almost forgot—the core PCE month-over-month rate is also decent. While it didn’t drop significantly below the previous value, it still came in lower than expected and matched the prior figure. This aligns with what I said before the September FOMC meeting: based on the data, there shouldn’t have been a rate hike in September. But now that September’s hike is done, the probability of an October rate hike should at least be lower for now. After the data update, yields on U.S. Treasuries from 2-year to 30-year maturities collectively dropped, showing that the market is betting on reduced Fed rate hikes. One @Gate, trade more markets.