Fed Rate Decision Faces Uncertainty with Imminent Inflation Data Revision

The Federal Reserve is poised to make one of its most significant interest rate decisions this year, but there's a catch, the inflation data used to guide 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. However, the Bureau of Economic Analysis is set to release its August Personal Consumption Expenditures report on September 30, which carries methodological revisions that will retroactively lower core PCE readings by 0.1 to 0.2 percentage points.

The timing of this revision 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 have both run the numbers, estimating that May 2026 core PCE could fall from a reported 3.4% year-over-year to somewhere in the 3.2% to 3.3% range after revisions take effect.