🚨🚨BABY STEPS TO RATE CUTS 🔥🔥🔥

The US Personal Consumption Expenditures (PCE) Price Index is out, and it’s a surprise: 0.0% month-over-month, down sharply from the previous 0.5%. This suggests a meaningful cooling in core inflation, just days ahead of the next

Federal Reserve policy decision on May 7.

It’s important to note that the PCE report is published by the Bureau of Economic Analysis (BEA), an agency independent from the Federal Reserve. But that doesn't mean Chair Jerome Powell isn’t watching it closely👀 or even using it as political cover. After all, the Fed may want to cut rates but appear neutral, especially in a contentious election year where Donald Trump has been vocal about wanting lower rates.

Powell likely doesn’t want to look like he’s caving to political pressure. But with inflation now easing visibly, this latest PCE number gives him the perfect data-driven excuse to begin rate cuts without raising eyebrows.

Market watchers are now increasingly expecting a dovish tone or even a rate cut in next week’s announcement. Whether it happens or not, one thing is clear: the Fed has more flexibility now than it did just a month ago.