The number that seems to have grabbed the market's attention today was in the Q3 GDP report as the reading on core PCE fell to 2.0% from 2.3% in a surprise drop.
The 2.0% number is a big one because it gets the Fed back on target and it comes ahead of tomorrow's PCE report. The current consensus for core PCE is +3.3% y/y and 0.2% m/m but given today's data, expect a miss.
Normally the third reading on GDP is a non-factor for markets but given the proximity to PCE, today might have been an exception.
In any case, the market is now pricing in 160 basis points in rate cuts in 2024, which is the highest so far and far above the 75 bps in the Federal Reserve's dot plot.