While the cumulative effect of inflation has had a pronounced influence on the U.S. economy, the view in relative terms is getting progressively better.
Judging by the personal consumption expenditures price index, inflation was expected to run at just a 0.2% rate in September and 2.1% from a year ago, according to Dow Jones estimates.
"Another strong quarter of GDP growth and close-to-target quarterly inflation reading will be welcomed by the Fed stuck between balancing the risks of inflation and the labor market," Citigroup economist Alice Zheng said in a note Wednesday.
Within the GDP report, the PCE rate for the quarter was just 1.5%, suggesting that the battle has been won.
While the market is still betting heavily on more rate cuts this year, the Fed likely will be cautious.
Persons:
Dow Jones, Alice Zheng, Shruti Mishra
Organizations:
Commerce Department, Labor, Citigroup, Bank of America
Locations:
U.S