"Fed's Megaphone": The inflation indicator most favored by the Fed is likely to remain basically flat.

[“Fed's megaphone”: The Fed's favorite inflation indicator may remain basically flat] A report co-authored by Wall Street Journal reporter Nick Timiraos, known as the “Fed's megaphone”, points out that according to data released by the U.S. Labor Department on Tuesday, although energy and food costs rose in September, pushing wholesale prices higher, some items included in the Fed's preferred inflation indicator may keep that indicator basically flat compared to levels in recent months. After a month-on-month decline of 0.1% in August, the Producer Price Index (PPI) rose by 0.3% month-on-month in September, in line with economists' expectations. PPI data usually fluctuates more significantly than the prices consumers see in stores and online. Excluding food and energy, the core PPI rise was lower than expected, increasing by 2.6% year-on-year, marking the mildest increase since July 2024. Due to the government shutdown causing delays in data release, the publication of this PPI data was more than a month later than originally planned. Two weeks after the deadlock ended, federal statistical agencies are still working hard to report the data. The impact of PPI data on Fed policymakers is limited, but some price data released on Tuesday will be used to calculate the Personal Consumption Expenditures (PCE) price index—a core indicator for the Fed to measure progress towards its 2% inflation target. The compilation of the PCE index combines relevant data from the PPI, Consumer Price Index (CPI), and import prices. As these data are released, forecasters can reliably estimate the approximate level of the PCE index.