Fed's preferred inflation gauge shows prices increased in line with Wall Street's expectations in July
Published On Aug 30, 2024, 8:41 AM
The core Personal Consumption Expenditures (PCE) index reported by the Fed increased by 0.2% in July, aligning with Wall Street's expectations and maintaining the previous month's pace. Over the past year, prices rose 2.6%, slightly below the anticipated 2.7%. In light of this data and recent remarks by Fed Chair Jerome Powell indicating confidence in inflation returning to the Fed's 2% target, a rate cut in September seems likely. Economists are observing the inflation trends cautiously, considering potential challenges in the labor market that may influence future monetary policy adjustments.
Stock Forecasts
SPY
Positive
The announcement concerning the Fed's outlook and the inflation figures suggest a plausible rate cut in September, which can be favorable for certain sectors like technology and consumer discretionary stocks.
XLI
Negative
However, the overall uncertainty in the labor market may add to volatility in the market, affecting stocks negatively in the short term as investors react to any changes in economic projections.
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