US PCE _IB
July Personal Consumption Expenditure (PCE) Price Data Confirms U.S. Economy Is Headed for a Soft Landing
Morgan Stanley:
"The three-month annualized rate of core PCE inflation is 1.7%. The disinflation that began in April continues. Such low inflation and solid economic growth call for a gradual adjustment in monetary policy. We expect three 25bp rate cuts starting in September."
Wells Fargo:
"Yesterday’s Q2 GDP report showed consumer spending revised up to a 2.9% increase, and today’s July PCE report shows personal consumption expenditure rising by 0.5%. While data for August and September are not yet available, robust growth is expected for Q3. Inflation continues to cool. The recent three-month core PCE inflation rate has fallen below the Fed’s 2% target. In conclusion, the July PCE data further strengthens the narrative that a soft landing is achievable."
Joseph Brusuelas, Economist at RSM:
"The takeaway from the July PCE data is that disinflation continues amid strong household spending and income. Price stability has been restored without a recession, supporting arguments for the Fed to lower restrictive interest rates."
Jason Furman, Harvard Professor:
"The most important data point today is the 0.4% increase in real consumer spending. This suggests that spending will remain strong in Q3, and while the gap between income and spending growth suggests that consumption may eventually slow, Fed rate cuts would empower consumers further."
---
Next Week: August Employment Report to Be Released, Crucial for Fed’s Rate Cut Decision
ING:
"If new job creation falls below 100,000 and the unemployment rate exceeds 4.4%, the Fed is expected to cut rates by 50bp."
Evercore ISI:
"The base scenario is for employment data to improve from July, prompting the Fed to make consecutive 25bp cuts. If data remains weak like in July, the Fed could make back-to-back 50bp cuts in September and November. Conversely, very strong data might lead the Fed to only make two 25bp cuts this year."
Wells Fargo:
"The August employment report will help determine whether the sharp deterioration in July’s jobs data was just noise from events like Hurricane Beryl or a sign that the labor market is cooling. We expect the August unemployment rate and job numbers to partially recover, leaning toward the latter scenario."
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
