The Core Personal Consumption Expenditures (Core PCE) price index is a key inflation measure closely watched by the Federal Reserve.
It tracks the changes in prices of goods and services, excluding food and energy, which are typically more volatile. This index gives a clearer view of underlying inflation trends.
Expected Data:
For the upcoming release, the market expects a 0.2% month-on-month increase in Core PCE.
This indicates that prices for goods and services, excluding the more volatile categories, are expected to rise slightly.
Market Expectations and Implications:
US Dollar: If the Core PCE comes in higher than expected it might push the dollar higher, as it could signal smaller rate cuts by the Fed.
Conversely, a lower number might weaken the dollar, suggesting more rate cuts before year end.
Personal Income measures the total income earned by individuals from all sources, including wages, salaries, investments, and government benefits.
This data is important because it gives insight into consumers’ ability to spend, which drives economic growth.
Expected Data:
For the upcoming release, a 0.2% month-on-month increase in Personal Income is expected. This indicates a modest rise in the income that consumers have available.
Market Expectations and Implications:
US Dollar: If income growth is stronger than expected, it could signal a more robust economy, potentially supporting the dollar as it may lead to increased consumer spending and, by extension, inflationary pressures.
A weaker-than-expected increase could have the opposite effect, slightly weakening the dollar as it offers room for the Fed to cut interest rates aggressively.
The Personal Consumption Expenditures (PCE) Price Index is a broad measure of inflation.
It tracks changes in the prices of goods and services purchased by consumers in the United States.
Unlike the Core PCE, this index includes all items, including food and energy.
The Federal Reserve closely monitors the PCE Price Index as it aims to maintain inflation at around 2% over the long term.
Expected Data:
The market expects a 2.5% year-on-year increase in the PCE Price Index.
This suggests that overall consumer prices have risen by 2.5% compared to the same period last year.
Market Expectations and Implications:
US Dollar: If the PCE Price Index comes in higher than expected it could strengthen the dollar, as it might prompt the Fed to smaller & fewer rate cuts in the months ahead.
Conversely, a lower figure could weaken the dollar, signaling less inflationary pressure and potentially a more dovish Fed.
