The Fed's main inflation measure will be released Wednesday. Here's what to expect
Data is expected to show ongoing price pressures and consumers who nevertheless continue to spend.
The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, is set to be released on Wednesday. Economists expect the data to show that inflation remains a persistent issue, with prices likely to have continued their upward trend in recent months. This is in line with other inflation measures, such as the Consumer Price Index (CPI), which have indicated that price pressures are still present in the economy.
Despite these ongoing price pressures, consumers are expected to have continued spending, which is a key driver of economic growth. This resilience in consumer spending is likely to be attributed to a strong labor market and wage growth, which have helped to support household incomes and confidence. The Fed has been closely monitoring inflation and economic growth as it considers its next policy moves, and this data will provide valuable insights into the current state of the economy.
Looking ahead, investors will be watching the PCE data closely for signs of whether inflation is starting to moderate or if price pressures are becoming more entrenched. The Fed's inflation target is 2%, and it will be interested in seeing if the data shows inflation moving closer to or further away from this goal. The central bank's next policy meeting is scheduled for late July, and the PCE data will be an important input into its decision-making process.
Originally reported by cnbc.com. FundingWire adds analysis for finance & markets readers.