The Fed’s preferred inflation gauge doesn’t typically surprise since consumer and producer gauges are released earlier in the month, providing valuable inputs that flow directly into the Personal Consumption Expenditures Price Index (PCE). Meanwhile, on Tuesday, forecasters expected the PCE core version of the indicator, which excludes food and energy due to their volatile characteristics, to land at 3.3% when published the following day. It would be the third consecutive month at that level. It was unlikely, in my view as of Tuesday, that it would decelerate, as overall cost pressures have caught fresh momentum from elevated fuel costs, and for that reason, on Tuesday I believed the “Yes” contract with a 3.2% threshold was potentially undervalued at just $0.42 in the Interactive Brokers Prediction Market, as it would pay a dollar back on a number in-line with projections or higher. In a Reuters poll of 47 forecasters, the minimum and maximum expectations as of Tuesday were 3.1% and 3.4%, indicating an unusually wide range of potential outcomes.
Past performance is not indicative of future results.
Overall Inflation Expected at 3.7%Also on Tuesday, the overall PCE price index was expected to be 3.7%, which would also mark an unchanged annualized increase for the third consecutive month. Because it includes food and energy, it has been higher than the core version, as fuel has been the predominant factor propelling inflationary pressures. Similarly, in the Reuters poll of 40 forecasters, a minimum of 3.4% coincided with a maximum of 3.9%, indicating a greater than typical chance of surprise. In the Interactive Brokers Prediction Markets, meanwhile, the “Yeses” at 3.6% and at 4% were going for $0.92 and $0.03, respectively, on Tuesday
Past performance is not indicative of future results.
Source for images: Interactive Brokers Prediction Markets.
Note: Prices are highest bids as of the morning of Sept. 29, 2026.
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