🔍 Summary of developments:
• Both the overall PCE index and Core PCE increased by 0.1% compared to last month.
• Core inflation (excluding food and energy) - often seen as the "cleanest" indicator - also met market expectations.
• This growth rate indicates that inflation is slowing down, but... the story is not over.
📉 Annual inflation: 2.1%
• The 2.1% level is still slightly higher than the Fed's target of 2%, but not significantly different.
• It reinforces the story of "ongoing disinflation" - but still needs to be closely monitored.
💼 Immediate impact:
• Stocks: may rebound slightly as there is no shocking data.
• Bonds: yields may remain flat, waiting for clearer signals from the Fed.
• USD: potential for narrow fluctuations, depending on interest rate expectations.
• Crypto & gold: may inch up slightly due to hopes that the Fed will be less "hawkish" in the future.
⚠️ But remember:
Although PCE is an important indicator, it does not completely dictate the Fed's actions. There are still many unclear pieces:
• Labor market
• Consumer spending
• NFP and CPI reports for May
🎯 Summary:
• PCE cooling down = Slight positive signal, but not convincing enough.
• The Fed will keep interest rates stable in the short term, unless other data clearly aligns.
• Traders should "fasten their seatbelts" and wait for more reports - especially the NFP next week could be a twist.
Do you think the Fed will cut interest rates in the June meeting? Comment below.
