September PCE Data Tonight, Fed Faces Moment of Truth

December 5th, as this critical time approaches this Friday, Wall Street's attention is collectively focused on the upcoming September Personal Consumption Expenditures (PCE) Price Index. As the Federal Reserve's preferred inflation gauge, this report is not only the first official inflation reading released since late September, but is also seen as the "lode star" for whether the U.S. stock market can break out of its recent volatility and establish its future direction.Due to the previous government shutdown causing a delay in data release, the market has been filled with a significant amount of uncertainty. Investors, analysts, and even Federal Reserve officials themselves are eagerly awaiting this delayed report to clear up the economic fog.At 23:00 today, the U.S. September Core PCE Price Index YoY will be announced, with a previous value of 2.9%. The overall PCE YoY is expected to record 2.8%, a slight increase from August's 2.7%. If this forecast comes true, it will be the highest level since April 2024; PCE MoM is expected to remain at 0.3%, matching the previous value.This PCE report is not only an economic check-up, but also the final puzzle piece for the Federal Reserve before next week's interest rate meeting. Currently, the Federal Reserve is in the midst of a fierce tug-of-war over its congressionally mandated "dual mandate" - to maintain low inflation and high employment. If the PCE data confirms that inflation is gradually declining (or meeting expectations), it will provide Fed officials with more justification for rate cuts, further solidifying the market's bet on a rate cut in December. If the data unexpectedly "exceeds expectations", it will not only weaken the case for a rate cut, but may even force the Federal Reserve to maintain rates in the current range of 3.75%-4%.