Traders see Fed rate cut of quarter percentage point in Nov

SAN FRANCISCO - US Federal Reserve policymakers are very likely to go ahead with cutting short-term US borrowing costs by a quarter percentage point next week, traders bet on Oct 31, after inflation data suggested price pressures continue to ease.

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Inflation, by the Fed's preferred measure, the personal consumption expenditures (PCE) index, was 2.1 per cent in September, down from an upwardly revised 2.3 per cent in August, a US Commerce Department report showed on Oct 31. The Fed wants to hit a 2 per cent inflation target.

A separate report from the US Labour Department showed the employment cost index rose 0.8 per cent in the third quarter from the previous quarter, less than what economists had forecast and the smallest increase since the second quarter of 2021.