The U.S. will release the PCE index tonight, and the Federal Reserve's rate cut window may be closing

Analysis: The U.S. will release the PCE index tonight, and the Federal Reserve's rate cut window may be closing. According to Golden Finance, on May 30, the U.S. will announce the personal consumption expenditure price index (PCE), which is the Federal Reserve's preferred inflation indicator. The market expects the month-over-month increase in the April PCE price index to be only 0.1%, with the year-over-year growth rate expected to decrease from 2.3% to 2.2%, approaching pre-COVID-19 levels. In terms of core data, the month-over-month growth rate of core PCE, which excludes the volatility of food and energy prices, is expected to be 0.1%, but the year-over-year growth rate will remain at a high level of 2.6%. Currently, the importance of PCE lies in the fact that the Federal Reserve prefers to use it to gauge the underlying trend of inflation. Analysts point out that the inflation effects of tariffs imposed by the Trump administration have just begun to permeate the U.S. economy. Most economists predict that even if Trump relaxes some tariffs, inflation may rebound to 3% in a few months. With the U.S. core PCE remaining stuck in the 2.8%-2.6% range for six consecutive months, the Federal Reserve's rate cut window is closing. Although some Federal Reserve officials still maintain a positive attitude toward rate cuts, the interest rate futures market shows that traders have sharply reduced their forecast for the probability of a rate cut in September from 68% a week ago to 47%. They also expect that the U.S. economy is at a crossroads of a new inflation cycle.

【Expectations from institutions for the U.S. April core PCE price index month-on-month rate to be released tonight at 20:30 (previous value: +0.0%)】

ING: +0.1%; Capital Economics: +0.1%; Moody's Analytics: +0.1%; Wells Fargo: +0.1%;

Citigroup: +0.1%; Deutsche Bank: +0.1%; Goldman Sachs: +0.1%; Deutsche Bank: +0.1%;

HSBC: +0.1%; ING: +0.1%; JPMorgan Chase: +0.1%; Barclays: +0.1%;

Nomura: +0.1%; UBS: +0.1%; Bank of Montreal: +0.1%; Sumitomo Mitsui: +0.1%;

Société Générale: +0.1%; TD Securities: +0.1%; Bank of Montreal: +0.1%; Mizuho: +0.2%;

Standard Chartered: +0.2%; Morgan Stanley: +0.2%; Royal Bank of Canada: +0.3%. [Reuters survey: +0.1%]