The last mile is always the hardest. For the Federal Reserve, it just got even harder. 

On Wednesday, new data released by the US Bureau of Economic Analysis showed that the personal consumption expenditures price index (PCE) — a.k.a., the preferred inflation gauge at the Fed — climbed 2.3% in October from a year earlier. That was in-line with expectations, but above the 2.1% rate seen in September, when the 2% finish line looked in sight. Now, with the possibility of inflationary tariffs on the horizon, the Fed also has to worry about a moving finish line.

It’s Getting Sticky

“Higher for Longer” quickly became the mantra of Fed officials when they embarked on one of the most aggressive rate-hiking campaigns in 40 years (to combat one of the nastiest spells of inflation in 40 years). That era came to an end — or appeared to come to an end — in September when the Fed issued a supersized 50 basis point rate cut, keeping pace with central banks around the world, followed by a 25 basis point rate cut in October. 

But now comes the tricky part: PCE ticked back up. So did the “core” inflation index, which excludes volatile food and housing costs, rising to 2.8% in October. Mortgage rates have increased, uncoupled from the federal funds rate. The US consumer remains strong — spending increased 0.4% in October year-over-year, the Commerce Department said — even as shoppers are scavenging for deals and confidence has predictably flip-flopped along ideological lines after the presidential election. And of course, possibly soon: likely inflationary tariffs, a potential trade war, and the general unpredictability of the new administration.

That has investors pricing in a slightly different version of the future:

• Analysts and investors still heavily expect another quarter-point rate cut during the Fed’s December meeting; CME’s FedWatch tracker on Wednesday showed the odds of a cut to a 4.25% to 4.50% range at 70%.
• But after that, cuts will likely be far more gradual than previously expected. FedWatch on Wednesday indicated just a 16% chance of two more quarter-point cuts by May of next year, down from odds of 41% in October.

Minute Men: The odds shift likely was a response to Fed minutes from the November meeting released Tuesday, in which Fed members seem all in on the slow and steady approach. Still, Wednesday’s PCE data shows that “inflation progress has stalled,” Matthew Luzzetti, chief US economist at Deutsche Bank, told The New York Times. The Fed’s most likely response? Going from “higher for longer” to “slightly lower now but still high for longer.”

Reddit’s top brass has upvoted a global expansion.

In a CNBC interview on Wednesday, the chief operating officer of Reddit, the world’s newest publicly-traded social media company, listed overseas markets like India and Brazil as one of the ways the “Front Page of the Internet” intends to chase growth. 

Of course every company wants more revenue, but for Reddit, which went public in March, the clock is ticking as the company has never turned an annual profit.

r/Profitability

Sure, it took Uber 15 years to make more money than it spends, but Reddit is already almost 20 years old. It looks like the company is headed in the right direction, as it reported its first-ever quarterly profit in the third quarter of this year. But it needs to keep that wheel turning.

AI is a big part of how Reddit plans to monetize the endless array of subreddits (i.e. forums) on its platform. For one thing, Reddit has agreed to license out its content to Google for training purposes, so it’s something of a data supplier. But it also plans to use AI to expand its user base and, consequently, the money it makes from advertisers:

• COO Jen Wong told CNBC that Reddit sees huge growth opportunities in countries including India and Brazil. Wong said just half of Reddit users reside outside the US, compared with other social media companies whose user bases are more reflective of global demographics. 
• Wong said Reddit plans to use generative AI to autotranslate large swaths of the site, opening it up to more global users so they can read about the endlessly entertaining interpersonal dilemmas of Redditors on the other side of the world.

Googleception: As it searches for revenue, Reddit is also thinking about expanding its search feature, Wong said, surfacing posts and forums that users may miss otherwise. Reddit is already doing pretty well traffic-wise because Google searches began surfacing Reddit posts more frequently this year, so layering in a better search function inside its own platform could expand the search utility of its product. 

Legions of people converged on their local electronics box store this morning, clawing at the heavily discounted personal computers that lured them from their warm beds into the mayhem of Black Friday yet again.

Or maybe not. Byte-sized sales results from Hewlett Packard (HP) and Dell, released just before the holiday, dented hopes of a rebound in the sluggish PC market. Unfortunately, there’s no fast reboot. 

Ctrl+Alt+Del

There was, of course, a not-so-distant past when much of the world was on lockdown, making PCs or PC upgrades an essential home staple. Sales peaked in 2021, with a record 340 million units sold, according to Gartner research. But that glorious past became the inglorious present: Sales tumbled 14.8% last year in what Gartner described as “the worst year in PC history,” marking the second double-digit decline in as many years and leaving sales 7% below pre-pandemic levels.

This year was supposed to be the year the market would hit the reset button and power on in the upward direction: Analysts noted many models sold in 2021 have been refreshed and Microsoft is ending support for Windows 10 in October 2025, upping the pressure for customers — especially corporate ones — to buy new PCs. HP’s and Dell’s results on Wednesday brought a crushing blow:

• Revenue at Dell’s PC business fell 1% year-over-year to $12.1 billion in the third quarter, missing analyst estimates. HP’s PC unit managed a 2% increase to $9.6 billion in a mostly overlapping three-month period, but likewise did not meet Wall Street’s expectations.
• Dell shares fell 12% and HP slid 11% in the pre-Thanksgiving session—executives might be happy the disappointing results dropped on a day when many were travelling or getting their turkey brine ready.

A View from Your Windows: Uptake of new PCs with Microsoft’s new Windows 11 has been slower than expected, HP CEO Enrique Lores told investors on earnings call, adding this could be a good sign for the future since the company expects “the impact of the upgrade to be more pronounced in 2025.”