The release of the PCE, which is most emphasized by the FRB.
The PCE deflator is an index that classifies the total amount of personal consumption expenditure in the United States into categories such as food and housing expenses.
The PCE core deflator, which is also released at the same time, is an index that excludes food and energy from the PCE deflator.
* The FRB pays more attention to this PCE core as a criterion for determining the policy interest rate than CPI and employment statistics.
It is the most important expenditure item that accounts for about 70% of the United States' gross domestic product (GDP), and is an important indicator for understanding the economic situation of the United States.
The PCE is released monthly by the US Department of Commerce.
The PCE is composed of the following items.
The PCE core deflator, which is also released at the same time, is an index that excludes food and energy from the PCE deflator.
* The FRB pays more attention to this PCE core as a criterion for determining the policy interest rate than CPI and employment statistics.
It is the most important expenditure item that accounts for about 70% of the United States' gross domestic product (GDP), and is an important indicator for understanding the economic situation of the United States.
The PCE is released monthly by the US Department of Commerce.
The PCE is composed of the following items.
If the PCE is higher than expected, it suggests that the growth of the US economy is accelerating.
On the other hand, if PCE is lower than expected, it suggests that the growth of the US economy is slowing down.
PCE also has a significant impact on the monetary policy of the Federal Reserve Board (FRB).
The FRB aims to keep the inflation rate at 2%, and if PCE is higher than expected, there is a possibility that interest rate hikes may be accelerated to suppress inflation.
If the inflation rate rises, the value of the currency will decrease.
Therefore, if it exceeds expectations, it could potentially lead to a weaker US dollar and a stronger Japanese yen.
It also affects the monetary policy of the FRB.
If the inflation rate rises, the FRB may accelerate interest rate hikes.
If interest rate hikes accelerate, the prices of bonds will decrease.
It also affects the performance of the company.
If the inflation rate rises, the company's costs will also increase.
When the costs increase, the company's profits decrease.
Therefore, if it becomes higher than expected, there is a possibility of a decline in the stock market.
If the inflation rate rises, the FRB will need to accelerate rate hikes.
If the result is higher than expected, the FRB may determine that there is an increased risk of high inflation and may suspend rate cuts.
If it becomes lower than expected, it could indicate that the Fed's monetary policy is unable to control the inflation rate, leading to a potential decrease in confidence in the monetary policy.
A decrease in confidence in the monetary policy could lead to a weaker dollar and stronger yen, potentially impacting the foreign exchange market, bond market, and stock market.
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