Federal Reserve faces scrutiny over potential rate hike based on soon-to-be-revised PCE data

The Federal Reserve is about to make one of its most consequential interest rate decisions of the year. The problem: the inflation data underpinning that decision has an expiration date. Markets are pricing in roughly 90% odds of a rate hike at the September 15-16 FOMC meeting, following a hotter-than-expected Consumer Price Index report that spooked traders and policymakers alike. But the Bureau of Economic Analysis is set to release its August Personal Consumption Expenditures report on September 30, and that update carries methodological revisions expected to retroactively lower core PCE readings by 0.1 to 0.2 percentage points. In other words, the Fed may tighten monetary policy based on numbers that, two weeks later, will officially become less alarming. The timing problem The September 30 PCE release isn’t just a routine monthly data drop. It coincides with the BEA’s 2026 annual national accounts revision, a sweeping update that recalibrates how the agency captures inflation across technology and service sectors. These revisions will reach back to 2021, adjusting five years of historical inflation data that the Fed has been using to guide policy. Goldman Sachs and JPMorgan ha...