The latest reading of the Federal Reserve’s preferred inflation gauge showed price increases were flat in October from the prior month, raising questions over whether progress in getting to the central bank’s 2% goal has stalled.

The core Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 0.3% from the prior month during October, in line with Wall Street’s expectations for 0.3% and the reading from September.

Over the prior year, core prices rose 2.8%, in line with Wall Street’s expectations and above the 2.7% seen in September. On a yearly basis, overall PCE increased 2.3%, a pickup from the 2.1% seen in September.

“Core PCE has been going sideways for the last couple of months,” Paul Gruenwald, S&P Global Ratings global chief economist, told Yahoo Finance. “If you think the Fed is on a declining rate path, which we do, that’s probably leaning toward the pause [cutting interest rates] camp.”

Gruenwald added that the Fed won’t be in a hurry to cut rates unless it sees a “more convincing decline” in core PCE.

Entering the release, markets have been debating how much further the Fed will cut interest rates over the next year. Minutes from November’s Fed meeting released on Tuesday revealed some officials believe the Fed could pause cutting rates if “inflation remained elevated.”

Recent data has added to that case. Earlier this month, the core Consumer Price Index (CPI), which strips out the more volatile costs of food and gas, showed prices in October posted an annual gain of 3.3% for the third consecutive month. Meanwhile, the core Producer Price Index (PPI) revealed prices increased by 3.1% annually in October, up from 2.8% the month prior and above economist expectations for a 3% increase.

In a recent speech, Federal Reserve governor Michelle Bowman expressed concern that the Fed’s progress toward its 2% inflation goal has “stalled” and said the central bank should proceed “cautiously” when cutting interest rates.

“We have seen considerable progress in lowering inflation since early 2023, but progress seems to have stalled in recent months,” Bowman said in a speech at the Forum Club of the Palm Beaches.

Still, markets expect the Federal Reserve to cut interest rates once more in 2024. As of Wednesday morning, markets were pricing in a roughly 67% chance the Fed cuts rates at its December meeting, per the CME FedWatch tool.

“The momentum in inflation toward the Fed’s 2% target has sputtered recently but not enough, in our view, to prevent the Fed from cutting interest rates in December,” Oxford Economics chief US economist Ryan Sweet wrote in a note to clients on Thursday.

Additional inflation data before the Fed’s interest decision on Dec. 18 will influence the Fed’s decision. Capital Economics deputy chief North America economist Stephen Brown wrote in a note to clients that the incoming CPI and PPI data for November, which will be out prior to the Fed’s December meeting, will be “pivotal for the Fed’s decision.”