Personal Consumption Expenditures inflation remains too ‘sticky’ for Fed to sanction immediate rate cuts.
26 April 2024
US core PCE inflation rose in line with forecasts in March at a 0.3% clip. Over the year this inflation measure, the Federal Reserve’s (Fed) preferred measure, stands at 2.8%. This is a level that hardly augers in early rate cuts and one should expect that the Fed will hold rates where they are when they convene next week for their committee meeting. The good news to this persistent inflation report is that it was no higher than markets had forecast (which has been an issue this year) so markets are unlikely to pile on the bear case in the short term.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.