Tonight’s PCE—are we handing the Fed a blade or a step?
Brothers, at 20:30 tonight, it basically comes down to one thing: whether the core PCE at 3.3% moves.
The expectations are laid out: both month-over-month for headline and core are 0.3%, with year-over-year at 3.7% and 3.3% respectively. What does that mean? Inflation is basically stuck in place and still nowhere near 2%. If you’re the Fed, do you dare to press the brake?
Consumption is even more troublesome. The market expects August spending to rise 0.8%, much more than July. Oil price gains are one thing, but Bank of America’s data shows that even excluding gasoline, spending still rises 5.7%. People complain about prices, but their hands keep swiping credit cards.
Last night, Williams delivered a softer message, saying “no rush,” and the odds of a rate hike in October dropped from about 70% to around 50%. But Baird’s side is being tougher, saying they “haven’t seen a trend of inflation coming down.” Even inside the Fed, they’re fighting with each other.
If tonight’s core PCE truly lands at 0.3% or above, then the 50% rate-hike probability will immediately jump higher.$CL $XAU $KORU
Brothers, at 20:30 tonight, it basically comes down to one thing: whether the core PCE at 3.3% moves.
The expectations are laid out: both month-over-month for headline and core are 0.3%, with year-over-year at 3.7% and 3.3% respectively. What does that mean? Inflation is basically stuck in place and still nowhere near 2%. If you’re the Fed, do you dare to press the brake?
Consumption is even more troublesome. The market expects August spending to rise 0.8%, much more than July. Oil price gains are one thing, but Bank of America’s data shows that even excluding gasoline, spending still rises 5.7%. People complain about prices, but their hands keep swiping credit cards.
Last night, Williams delivered a softer message, saying “no rush,” and the odds of a rate hike in October dropped from about 70% to around 50%. But Baird’s side is being tougher, saying they “haven’t seen a trend of inflation coming down.” Even inside the Fed, they’re fighting with each other.
If tonight’s core PCE truly lands at 0.3% or above, then the 50% rate-hike probability will immediately jump higher.$CL $XAU $KORU
