WHAT IT MEASURESThe Federal Open Market Committee sets the target range for the federal funds rate and explains how it is weighing employment, inflation and economic conditions. The Chair's press conference begins at 2:30 p.m. ET.
WHY MARKETS WATCHPolicy rates influence financing costs and the discount rates used to value future cash flows. Investors also study the statement and press conference for changes in the Committee's risk assessment—not only the rate decision.
COMPARISON THAT MATTERSOn September 16, the Committee raised the target range by 0.25 percentage point to 3.75%–4.00%. This meeting is not scheduled to include a new Summary of Economic Projections, so compare the statement language, implementation note and press conference with September's record.
TWO-SIDED SCENARIO MAP01A firmer inflation assessment or greater emphasis on upside price risk could keep the expected policy path restrictive and challenge rate-sensitive valuations.02More emphasis on slowing activity or labor-market risk could shift attention toward future easing, while any supportive valuation effect would still depend on why growth is weakening.
WHAT IT MEASURESBEA's first estimate of inflation-adjusted U.S. output for the July–September quarter, reported at a seasonally adjusted annual rate with contributions from consumption, investment, government, exports and imports.
WHY MARKETS WATCHGDP helps frame the pace and composition of economic activity. Markets look beyond the headline to domestic demand, inventories, trade and price measures because different components can imply different earnings and policy paths.
COMPARISON THAT MATTERSSecond-quarter real GDP was last estimated to have increased at a 2.2% annual rate, after 2.5% in the first quarter. Compare the advance estimate with those revised baselines and examine real final sales to private domestic purchasers, not only the headline.
TWO-SIDED SCENARIO MAP01Broader growth led by consumption and private investment could support the earnings outlook, while also keeping inflation and policy-rate questions active.02Softer growth could increase concern about demand and profits; a lower headline caused mainly by inventories or imports would carry a different message from weak domestic final demand.
WHAT IT MEASURESTracks personal income, disposable income, consumer spending, saving, and the PCE price indexes used to assess consumer inflation.
WHY MARKETS WATCHThe release connects household purchasing power and spending with the Federal Reserve's preferred broad inflation framework. Markets watch both nominal and inflation-adjusted changes, plus headline and core prices.
COMPARISON THAT MATTERSIn August, personal income rose 0.2%, current-dollar PCE rose 0.9%, real PCE rose 0.6%, and the PCE price index rose 0.3% month over month and 3.4% year over year; core PCE prices rose 0.2% and 3.0%. Check revisions and the saving rate alongside September's figures.
TWO-SIDED SCENARIO MAP01Firm real spending with persistent core price pressure could support demand while complicating the inflation and policy debate.02Cooling inflation with resilient real income could improve purchasing-power context; weaker real spending or income would raise a different concern about household demand.
WHAT IT MEASURESMeasures quarterly changes in employer costs for wages, salaries and benefits while holding the mix of occupations and industries more constant than simple average-pay measures.
WHY MARKETS WATCHECI is a closely watched gauge of underlying labor-cost pressure. Compensation trends can affect household income, company margins, pricing decisions and the policy outlook.
COMPARISON THAT MATTERSIn the second quarter, civilian-worker compensation rose 0.9% seasonally adjusted and 3.4% over 12 months; wages and salaries rose 0.9% in the quarter and 3.2% over the year, while benefits rose 1.0% and 3.8%. Compare public and private sectors and quarterly versus annual rates.
TWO-SIDED SCENARIO MAP01Broad acceleration in wages and benefits could revive concern about persistent labor-cost pressure and margin or policy implications.02Further cooling could support a moderation narrative, though weaker compensation may also reflect softer labor demand and one quarter does not define a trend.
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