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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
- Conditional on any surprise Q2 revisions in Thursday’s Q2 release, a core PCE print of 0.15% M/M in July would allow the FOMC to see 0.21% M/M increases to year-end to remain consistent with the median forecast of 2.8% Y/Y for Q4 from the June SEP.
- We chart an illustrative forecast with 0.2% M/M increases from August onwards, which yields 2.78% in Q4 but would have been met with a six-month average of just 2.3% annualized over 2H24 (highlighting the aforementioned base effects at play).
- Alternatively, a continuation of recent 0.15% prints would yield 2.6% Y/Y for Q4 and see a six-month average of 1.8%. The median FOMC participant forecast end-2025 core PCE inflation at 2.3%.
- Those base effects have seen Chair Powell previously deem an end-2024 core PCE figure of 2.6% or 2.7% Y/Y as a “really good place to be”.
- The inflation trajectory therefore looks promising, hence the rapidly increased focus on the labor market where latest data for July put the unemployment rate already fractionally above the FOMC’s long run estimate of 4.2%.
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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