The Macro Minute with Darius Dale What did the delayed September PCE Report signal about the health of the US consumer? What did it signal about the Fed’s current policy setting?
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Dec 5, 2025 The discussions reveal key insights from the delayed September PCE Report, highlighting a resilient U.S. economy and persistent inflation challenges. Darius points to weak positive impulses in real and goods PCE, signifying consumer strength. He explores connections between disposable income and consumer health, while discussing the risks of the Fed lagging in policy adjustments. Trends in repo market funding stress and evolving liquidity conditions are also examined, raising concerns about future economic stability.
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Delayed PCE Confirms Consumer Resilience
- The delayed September PCE reinforced a resilient U.S. economy with positive real PCE and goods consumption impulses.
- Weakly positive income and low savings show consumers continue to spend despite headwinds.
Inflation Signals Question Fed's Policy Rate
- Core and housing PCE deflators showed strong negative impulses, implying the Fed's policy rate may be too high relative to current inflation dynamics.
- Tariff-driven disinflation and below-trend inflation gauges suggest the Fed risks being obtuse about the policy rate level.
Wages And Tariffs Shape Inflation Path
- Weak positive wage and salary compensation combined with private-sector labor income metrics point to persistent consumer strength.
- Headline and Supercore PCE weakness supports a 'tariff pig in the inflation python' disinflation thesis.