At a time when most Federal Reserve officials see lower interest rates head, a key report on Wednesday is expected to show inflation drifting further away from target. The Commerce Department will release the October look at its personal consumption expenditures price index, the Fed’s primary yardstick to measure the pace of price increases. Economists surveyed by Dow Jones expect the headline all-items measure to show a 0.2% monthly increase while core, which excludes food and energy, is projected higher by 0.3%. While both those readings would be the same as September, the respective annual rates are projected to nudge up to 2.3% and 2.8%, respectively. While that’s an improvement on their mid-2022 peaks, the trends both show that the Fed has yet to reach its 2% goal. What’s more, markets are starting to anticipate that Donald Trump’s presidential election victory and his pro-growth agenda, along with a plan to impose substantial tariffs on global imports, could make the Fed’s task even more difficult. “Recent data show progress on inflation has slowed,” Brett Ryan, senior U.S. economist at Deutsche Bank, said in a note. “This policy mix will reinforce these signals.” In fact, Ryan forecasts that core PCE inflation “will stall” around 2.5% or higher all the way through 2026, even as Fed officials have stated their intent to continue lowering interest rates. Markets lately have become more skeptical of the Fed’s ability to ease policy. Market-implied odds of a December cut were just above 50% in Tuesday trading, with the expectation that the fed funds rate will come down just 75 basis points between now and the end of 2025, according to the CME Group’s FedWatch measure of fed funds futures pricing. “Recent wage data shows gains remain elevated and suggests core inflation is unlikely to cool near the Fed’s 2% target,” BlackRock experts said Monday in their weekly market note. “Markets have been pricing out Fed rate cuts — and moving closer to our view — as it becomes clearer that inflation pressures could prove persistent.”