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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 OUTLOOK/OPINION
The underlying components of April's CPI and PPI reports point to a core PCE reading for the month of 0.2-0.3% M/M, by most estimates we've seen (for more on April's price dynamics, see our Inflation Insight).
- That would mean 3 consecutive months of 0.3% M/M core PCE - and on the lower end of prevailing estimates, anything below 0.24% M/M would be the slowest gain since Feb 2021. That could make the May 27 PCE release a little more interesting than usual.
- PCE is the Fed's preferred gauge of price pressures and Powell cited core PCE specifically at the May press conference in terms of evidence that they were "making some progress" on disinflation.
- While there's still one more CPI release before the June FOMC (May's reading on June 10), that is in the blackout period and so we won't get any Fed commentary on it before the decision. A soft PCE reading could help tip the scales against a bigger-than-50bp hike even if the CPI reading comes in a little above expectations.
Source: BEA, MNI
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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