- In May, personal consumption expenditures, or PCE, increased by 2.6% from the previous year as anticipated, supporting market expectations for an early rate reduction. The Federal Reserve’s December meeting is the central bank’s last meeting of the year, and markets were recently pricing in a single rate drop. If the Fed determines that inflation is over, this projection may need to be revised.
- Furthermore, the recent data, which shows that inflation pressures are abating, may invigorate efforts to lower interest rates earlier than previously thought. The Federal Reserve favors this number since it is more inclusive and does not include more erratic goods like food and energy. Because it covers a wider range of goods, the consumer price index, or CPI, is the most widely used inflation indicator. It shows a price rise of 3.3% in May, which is somewhat higher.
- Regarding the news announcement, what are the markets saying? Not a lot. The EUR/USD pair was stable, circling $1.07, the flatline. Once the USD/JPY broke over the milestone earlier today, it turned around and fell below 161. Before Friday’s opening, the main stock averages’ futures contracts were flashing green. As we approach the last trading day of the first half of the year, the broad-based S&P 500 is already aiming for gains of over fifteen percent.
Source:
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