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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US DATA
- A core PCE print of 0.13% M/M in May (per unrounded estimates in part 1) would see the three-month rate ease from 3.5% to 2.9% annualized but the six-month rate accelerate a tenth to 3.3% as the particularly soft 0.09% M/M from Nov’23 drops out.
- Looking ahead, it would leave inflation on a good track to meet the FOMC’s recently upward revised core PCE forecast of 2.8% Y/Y for 4Q24 from the June SEP.
- Indeed, it would be met with a monthly rate of 0.20% M/M from June onwards, implying a less troublesome 2.4% annualized over 2H24. That run rate would be close to the 2.3% that the median FOMC participant sees for end-2025 core PCE inflation – see chart.
- Chair Powell touched on the base effects at play on 2024 figures here. From the MNI Fed Review of the June decision: On the increase in the PCE inflation forecasts for 2024 by 0.2pp to 2.6% (headline) and 2.8% (core) despite the softer May print, and that being compatible with a rate cut later this year, Powell chalked most of the PCE acceleration up to year/year base effects, saying "if you're at 2.6% or 2.7%, that's a really good place to be."
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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