Markets await the Fed’s preferred inflation gauge, which could influence expectations for rate cuts before key remarks by Chair Warsh.
The Bureau of Economic Analysis releases July’s Personal Consumption Expenditures price index at 8:30am Eastern, a critical input for Federal Reserve policy. Consensus forecasts headline PCE rising 0.07% month-on-month, reversing June’s 0.11% decline, while core PCE is expected to climb 0.18% with annual rates easing slightly to 3.2%-3.3%.
June’s headline PCE marked a rare negative print, raising questions about whether the dip signaled a sustained slowdown or a temporary distortion. The data arrives two days before Fed Chair Warsh’s Jackson Hole address, where markets will parse his remarks for clues on the pace of rate cuts.
A softer-than-expected reading could bolster arguments for continued easing, pressuring the dollar and lifting risk assets. Conversely, a hotter print may revive hawkish concerns, particularly after a split FOMC vote and rising dissent over the discount rate.