BEA changed PCE methodology as US core inflation slowed to 3%

• —Core PCE came in at 3% y/y versus 3.3% expected; 0.2% m/m
• —RBC estimated the methodology change cut the index by ~0.18 pp, 0.16 pp from software
• —Household spending rose 0.9% while the saving rate fell from 4.6% to 4.1%
• —Odds of a Fed rate hike on October 28 dropped to about 35%