The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, is all set to be released later in the day, ahead of the Federal Open Market Committee's (FOMC) meeting scheduled for next week.

According to a Dow Jones estimate cited by MarketWatch, September PCE is expected to rise 0.3% for the headline number, while the core PCE is expected to rise 0.2% for the period. On an annual basis, headline PCE is expected to be unchanged at 2.9% in September, while core inflation is likely to be at 2.8%.

What Are Fed Rate Cut Chances?

According to data from the CME FedWatch tool, there is a 87.2% probability of a 25-basis-point rate cut next week.

This comes amid signs of a cooling labor market. According to data released by payroll processing firm ADP, U.S. companies unexpectedly cut 32,000 jobs in November amid an uncertain macroeconomic environment.

Small businesses registered a sharp pullback during the month, with a net decline of 120,000 employees, while mid-sized and large businesses added 90,000 employees on a net basis.

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