SEP · ISSUE 40 · October 1, 2026

MACRO · TODAY

Today's inflation print decides the Fed's next move

One number at 08:30 ET, three hours of a market holding its breath. August Core PCE shapes the Fed's next rate decision.

CORE PCE (CONSENSUS)

+0.3%

up from +0.2%

OCT HIKE ODDS

48%

down from 61%

US 10Y

~5.2%

20+ year highs

THE NUMBER

+0.3%

↑ expected monthly core, accelerating

The PCE deflator is the Fed's preferred inflation measure. A monthly core at +0.3% or higher reinforces the case for a hike; a soft print opens the door to relief in bonds.

DATA

ZOOM IN

48%

▼ from 61% in 24h

The rates market changed its mind in hours. Not on new data, but on the tone of a central banker.

October hike odds went from a coin-flip leaning yes to a coin-flip leaning no, on a single sentence from the Fed.

COIN-FLIP: — Odds near 50%: the market genuinely isn't sure.
RATES MARKET: — Where traders price, in real time, what the Fed will do next.

QUOTE

AUTHORITY

No rush, no urgency

“There's no need for urgency on another rate hike.”

John Williams · President · New York Fed

Without touching rates, he moved the whole curve. That's forward guidance: steering expectations with words alone.

FORWARD GUIDANCE: — Steering the market on future rates by communicating, without acting.
THE CURVE: — The map of bond yields across maturities.
HAWKISH / DOVISH: — Leaning toward higher rates (hawkish) or toward easing (dovish).

TREND

12 MONTHS

The 10-year yield has climbed all year

OCT '25JAN '26APR '26JUL '26SEP '26

From 4.6% to 5.25% in a year. Today it eases a touch after the Fed's pivot, but it's still above 5%.

Until the 10Y closes back below 5%, the cost of capital keeps squeezing anything sensitive to rates.

10Y: — The US 10-year Treasury, the most important benchmark rate in the world.
COST OF CAPITAL: — What it costs to finance. Rises with yields and slows investment and valuations.

SCENARIOS

THREE PATHS

The three possible endings to today's PCE

HOT (+0.4% OR MORE)
Confirms sticky inflation. Yields climb, the October hike is back on the table, and rate-sensitive names suffer.
IN LINE (+0.3%)
As expected. A muted reaction: the market stays fixed on Friday's jobs report to decide.
SOFT (+0.2% OR LESS)
Relief. The 10Y could probe 5% from above, and the Fed's dovish tone gains ground. This is the print risk assets want.

Same number, three opposite reactions. Knowing the map beforehand keeps you from trading on impulse.

STICKY: — Inflation that won't come down despite high rates.
DOVISH: — A soft bias: less appetite to raise rates.

PROBABILITY

OCT FOMC

What the market is pricing for October

HIKE PROBABILITYDown from 61% after the Fed48%

NO CHANGE IN RATESThe scenario the market prefers52%

A market split down the middle. That's why a single inflation print can move it this much.

A day ago it was 61% for a hike. Today it's close to a coin toss. Today's PCE tips the balance.

FOMC: — The Fed committee that sets US interest rates.
PRICING IN: — Building into today's price what the market expects tomorrow.

CALENDAR

NEXT 48H

The data that moves the week

WED SEP 30 · 08:15 ET	ADP PRIVATE PAYROLLS	Medium	A warm-up for Friday's jobs. A weak print supports the dovish tone.
WED SEP 30 · 08:30 ET	CORE PCE + FINAL GDP	High	The number of the day. Shapes the Fed's next rate decision.
WED SEP 30 · AMC	MICRON (MU) EARNINGS	High	A memory and semis bellwether. Drags the whole AI chain tomorrow.
FRI OCT 02 · 08:30 ET	NON-FARM PAYROLLS (NFP)	High	The monthly jobs print. Closes the picture the Fed takes into October.

Two data blocks and one earnings print: between today and Friday, the market's tone gets decided.

ADP: — A private payrolls report, ahead of Friday's official one.
AMC: — After Market Close: earnings released after the US close.
NFP: — Non-Farm Payrolls: the monthly US jobs number that moves markets most.

WRAP

Did this briefing help?

If it made sense of why one inflation print matters this much, share it. Another dose tomorrow.

One carousel a day, Monday to Friday. Tomorrow another story, another concept.

Daily briefing · Mon-Fri 16:00 ET

PCE: — The inflation gauge the Fed watches to set rates.
10Y: — The 10-year Treasury, the global benchmark for rates.

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