The data once again reinforces the expectation of a soft landing, and the Fed may no longer need to raise interest rates
Today's US macro data once again confirmed the economy's soft landing tendency. Real personal consumption expenditures in June were recorded at a monthly rate of 0.4%, higher than the expected 0.3%. At the same time, the PCE monthly rate was recorded at 0.2%, and the core PCE annual rate was recorded at 4.1%, both lower than the previous value. On the other hand, the labor cost index quarterly rate in the second quarter also weakened, with an increase of 1% in the second quarter, lower than 1.2% in the first quarter. More importantly, Powell also mentioned this indicator in a press conference. At the same time, the slowdown in wage growth and employment benefit growth also shows a cooling of labor costs, which is consistent with the Fed's Beige Book that wage growth in many regions is returning to or approaching pre-epidemic levels. Overall, these data should make investors more confident that inflation is on a sustained slowdown trend, inflation can actually return to the 2% target, and the Fed does not need to further tighten policy. (The above views are from ING Bank, for reference only)
