"The US dollar held steady on Friday as investors awaited the release of the Federal Reserve's preferred inflation gauge, the PCE price index, alongside personal spending and income data. Consensus expects core prices to rise 0.2% in August, slowing from July's 0.3% pace, while personal spending is seen holding at 0.5% and income growth easing to 0.3%. The upcoming data are pivotal in shaping expectations for the Fed's policy path after a week of cautious tone from Jerome Powell and resilient economic data."
"Stronger GDP, durable goods, and jobless claims yesterday questioned the urgency of aggressive easing, prompting markets to scale back the probability of multiple cuts this year and the next. Still, an interest rate reduction in October remains very likely. Treasury yields were little changed, with the 10-year holding near 4.18%, its highest level in three weeks."
Investors await the PCE price index, personal spending, and income figures that will influence the Fed's policy outlook. Consensus forecasts core PCE rising 0.2% in August, down from July's 0.3%, personal spending steady at 0.5%, and income growth moderating to 0.3%. Recent stronger GDP, durable goods, and jobless claims have reduced pressure for rapid rate cuts, leading markets to lower the probability of multiple cuts this year and next. An October rate reduction is still considered very likely. Treasury yields remain near recent highs and could become volatile if data deviate from expectations.
Read at London Business News | Londonlovesbusiness.com
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