What to Expect from this Friday’s Big Fed Inflation Reading

Welcome to Extreme Investor Network, where we provide you with cutting-edge insights and analysis on the economy to help you make informed investment decisions. Today, we are excited to discuss the latest inflation news that could impact the markets.

The Commerce Department is set to release a key economic report on Friday, and it is expected to bring some positive inflation news. The personal consumption expenditures price index, a measure closely monitored by the Federal Reserve, is projected to show little to no monthly increase for May. This would be the first time since November 2023 that we see such a trend.

Of particular significance is the core PCE price index, which excludes volatile food and energy prices. It is expected to show its lowest annual reading since March 2021. This is a crucial indicator for Fed policymakers as they aim to maintain stable inflation levels.

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The forecasts for Friday’s numbers suggest that the headline PCE price index will remain flat on a monthly basis, while the core index is expected to rise slightly by 0.1%. Both indices are forecasted to be at 2.6% on a year-over-year basis.

This anticipated softening in core PCE prices is seen as a positive development by experts like Beth Ann Bovino, chief economist at U.S. Bank. She believes that this will be good news for the Fed and for consumers’ wallets, although the impact may not be immediately felt by the public.

Despite the progress made in reining in inflation since the rate hikes began in March 2022, Fed officials are cautious about declaring victory. The steep climb in prices since March 2021 has been significant, with core PCE rising by 14%. This is why the Fed continues to closely monitor the data and consider further rate cuts.

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Looking ahead, futures markets are pricing in the likelihood of the Fed enacting its first quarter-percentage-point cut in September, followed by another cut by the end of the year. This will depend on the economic data and whether inflation trends continue to soften.

In addition to the inflation numbers, the Commerce Department will also release figures on personal income and consumer spending. Estimates suggest a rise of 0.4% in personal income and 0.3% in consumer spending.

Stay tuned for more updates and insights on the economy and investment opportunities. At Extreme Investor Network, we strive to provide you with unique and valuable information to help you navigate the complexities of the financial markets. Don’t miss out on the latest trends and analysis – join us today!

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