US PCE Inflation Rises in September
September PCE inflation picked up while monthly core gains held steady. For gold holders, persistent price pressure complicates the case for Fed cuts.
by Graham Ellery2 min read
US personal consumption expenditures prices rose 0.5% in September, up from 0.3% in August, according to the Bureau of Economic Analysis's October 29, 2026 release. Annual headline inflation climbed to 3.6% from 3.4%. For those of us holding gold, the new report gives the Fed another reason to demand evidence that inflation is cooling before lowering rates.
Underneath that acceleration, core prices, which exclude food and energy, rose 0.3% in September, matching August's monthly pace. Annual core inflation edged up to 3.1% from 3.0%, the BEA's full release shows. We therefore have faster headline inflation alongside persistent core increases. You cannot explain away the entire increase in the cost of living by excluding food and energy, because the remaining basket is still getting more expensive.
Does that make another rate increase inevitable? The Fed's October 28 statement left its target range at 3.75% to 4.00% and said more information would help determine policy. As we covered in Fed Holds Rates With Two Votes for a Hike, support for tighter policy was already explicit. This report arrives after that decision. Our view is that steady monthly core inflation gives us little basis to assume an imminent cut, while a single release cannot determine the next vote.
The same BEA report also shows why higher spending does not necessarily mean consumers are buying much more. September spending increased 0.5% in current dollars, but less than 0.1% after inflation. Disposable income after inflation fell 0.3%. We are paying more with little increase in the volume of consumption, while household purchasing power is being squeezed. If you own miners as well as bullion, this is a reason to keep the inflation hedge and the business exposure distinct: a consumer price index does not measure a mine's selling prices, operating costs or debt terms.
For your gold holdings, we would resist treating hotter inflation as an automatic buy signal. Bullion pays no interest, so the return available elsewhere affects the cost of holding it. Inflation protection can attract buyers, while expectations of tighter policy can work against that demand. September's backward-looking price increase cannot tell us which force will dominate, or establish what investors now expect inflation to be. We would want evidence of sustained cooling in core prices before building an easier-money case for gold around a future Fed cut.
We will watch October PCE on November 25 for core momentum, then the December 8-9 FOMC meeting for the rate decision and updated projections.
Seek the truth and be prepared,
Equedia News
Sources
- US Bureau of Economic Analysis, Personal Income and Outlays, September 2026, October 29, 2026
- US Bureau of Economic Analysis, September 2026 full release and historical comparisons, October 29, 2026
- Federal Reserve, FOMC statement, October 28, 2026
- Equedia News, Fed Holds Rates With Two Votes for a Hike, October 28, 2026
- Federal Reserve, 2026 meeting calendar, consulted October 29, 2026
Disclaimer: This letter is for informational and educational purposes only and does not constitute investment advice. We own gold and gold stocks. Past predictions and performance are not indicative of future results. Please see our full terms of use and disclaimer at equedia.com.
