10/01/2026
Inflation came in better than expected this morning. The Fed is still going to raise rates.
August PCE, the Fed's preferred inflation gauge:
Headline — 3.4% (forecast was 3.7%)
Core — 3.0% (forecast was 3.3%)
Better than expected. Still a full point above the Fed's 2% target.
And one catch most headlines will skip: this report included the annual revisions, which lowered past inflation readings. Some of the "cooling" is history being restated, not prices actually slowing down.
Here's the part that matters for your money.
The Fed already hiked on September 16 — a quarter point, to 3.75%–4.00%. First increase since 2023. And 16 of the 18 policymakers expect at least one more before the year ends. Their own projections put rates near 4% through the end of 2027.
So stop asking when rates come down. Start asking what your plan looks like if they don't.
Higher-for-longer is good news if you're sitting on cash, CDs, or short-term bonds. It's a problem if you're carrying debt, or if your portfolio was built for the rate cuts everyone was predicting a year ago.
Most people don't know how these conversations impact their financial goals. That's the conversation to have this week — not in 2027.
