Dollar Slips as Inflation Data Eases Fed Rate Concerns

2026-09-30 12:54 By Agna Gabriel 1 min. read

The dollar index slipped to 101.1 on Wednesday as softer-than-expected inflation reinforced expectations that the Federal Reserve may leave interest rates unchanged in October.

The headline PCE price index rose 0.3% mom, while core PCE, excluding food and energy, increased 0.2%.

At the same time, consumer spending remained resilient, with households continuing to purchase vehicles, furnishings and clothing despite elevated gasoline and other costs.

Revised data also showed stronger economic growth, with Q2 GDP now estimated at a 2.2%, up from 1.5%, while Q1 growth was revised higher.

Hiring by US companies also strengthened in September, suggesting economic activity remains relatively firm.

The government’s employment report due Friday is expected to show a 90K increase in payrolls, providing another key input for the Fed ahead of its October 28 meeting.

Despite Wednesday’s decline, the dollar has gained more than 1.5% in September and was little changed over the third quarter.



News Stream
Dollar Slips as Inflation Data Eases Fed Rate Concerns
The dollar index slipped to 101.1 on Wednesday as softer-than-expected inflation reinforced expectations that the Federal Reserve may leave interest rates unchanged in October. The headline PCE price index rose 0.3% mom, while core PCE, excluding food and energy, increased 0.2%. At the same time, consumer spending remained resilient, with households continuing to purchase vehicles, furnishings and clothing despite elevated gasoline and other costs. Revised data also showed stronger economic growth, with Q2 GDP now estimated at a 2.2%, up from 1.5%, while Q1 growth was revised higher. Hiring by US companies also strengthened in September, suggesting economic activity remains relatively firm. The government’s employment report due Friday is expected to show a 90K increase in payrolls, providing another key input for the Fed ahead of its October 28 meeting. Despite Wednesday’s decline, the dollar has gained more than 1.5% in September and was little changed over the third quarter.
2026-09-30
Dollar Set for Strong Monthly Advance
The dollar index traded around 101.4 on Wednesday and was on track to gain roughly 2% for the month,as concerns over persistent energy-driven inflation and a resilient US economy reinforced expectations that the Federal Reserve would need to continue its tightening cycle. Oil prices remain elevated as US-Iran negotiations remain deadlocked, although signs of improving energy flows from the Middle East have eased supply concerns. Meanwhile, Fed Governor Michael Barr reiterated his view that additional rate increases will likely be necessary to curb inflation, while New York Fed President John Williams said another rate hike “late this year” could be appropriate. Markets are currently pricing in nearly one percentage point of Fed rate increases over the next 12 months. Investors now await Wednesday’s PCE price index report, the Fed’s preferred inflation gauge, followed by Friday’s closely watched monthly jobs report for further guidance.
2026-09-30
Dollar Extends Gains
The dollar index strengthened to 101.4 on Tuesday, extending a 0.2% gain in the previous session and trading at three-month highs, as the greenback continued to benefit from expectations of further Fed tightening. Little progress has been made in US-Iran talks aimed at ending the conflict and fully reopening the Strait of Hormuz. A decline in oil prices on Tuesday did little to ease concerns that still-elevated energy costs could fuel inflation and prompt further Fed rate hikes. Meanwhile, strong US economic activity is also supporting the dollar. Job openings and consumer confidence released today, however, surprised on the downside. The PCE inflation report tomorrow and the jobs report on Friday should provide further clarity on the strength of the US economy. Swaps traders are pricing in nearly a full percentage point of Fed rate hikes over the coming year. The greenback is up 1.8% in September but is little changed in the third quarter.
2026-09-29