In the wake of yesterday’s US Q1 GDP data, the markets offer a glimpse into their potential reaction to today’s release of PCE price data. The significance of this economic indicator lies in its influence on the Federal Reserve’s perspective, which currently stands firm against any rate cuts in the immediate future. However, the persistence of inflationary pressures could prompt some reconsideration of a possible July rate hike. While the narrative of disinflation still holds sway, it would be premature to completely disregard the potential for a summer move should the data necessitate it. Therefore, it is prudent for traders to proceed with caution and avoid overextending their expectations based on limited economic data. The release of the PCE data today will provide further clarity on the Fed’s stance and the trajectory of monetary policy for the year ahead.
Navigating Post-GDP Data: Assessing Market Reactions to PCE Inflation
