It’s getting to be that lovely time of year again!  The leaves begin to turn a stunning shade of orange.  The mornings are crisp and you can leave your windows open in the afternoons to relish the fresh air from indoors. College football is in full swing, and the MLB playoffs are about to start. The federal government threatens to shut down.  What’s not to love?

Personal Consumption Expenditures, which is the gauge of inflation that the Federal Open Market Committee relies on more than any other to determine how to manage their interest rates, was published today. It came in inline with expectations and with no variance from last report at a monthly increase of 0.2%, bringing the year-over-year increase to 2.9%. One way to look at it is that we’re only 0.9% away from their target they set three years ago. The other way to look at it is that we are almost 50% higher than that target. Data is easily spinnable.

Providing the Bureau of Labor Statistics keeps its doors open through Thursday and Friday of next week we should see the Jobs Report. You’ll remember that the Unemployment Rate ticked up from 4.2% to 4.3% this month, and it’s expected to remain at 4.3% for October.  The Feds are projecting that the Unemployment Rate will hit 4.5% by the end of 2025

The prospect of a government shut down used to be considered a crisis and we’d see interest rates move lower in anticipation of the disruption of the services to which we have become accustomed in our modern world.  But since the arguments over budget restructuring are so common place and the last shut down was seven years ago (which resulted in only minor inconveniences for most citizens), most analyst are shrugging off any impact the lack of a budget agreement might cause.

Following the pattern after the September 2024 Fed rate cut, it may be worth noting that over the last two weeks, longer term interest rates have risen 0.12% this time around as well.