Fed's Preferred Measure Of Inflation In Focus: How June's PCE Inflation Figure Plays Into September Rate Decision
Portfolio Pulse from Piero Cingari
The June Personal Consumption Expenditure (PCE) price index report, the Fed's favored gauge of inflation, is expected to be the primary focus of the central bank and financial markets. The headline PCE inflation is expected to drop from 3.8% in May to 3% in June. Core PCE inflation is expected to decline from 4.6% to 4.2% year-on-year in June. The PCE inflation data will be crucial in confirming whether the ongoing disinflation trend remains well-defined across various economic indicators. The iShares Treasury Inflation Protected Securities (TIPS) Bond ETF (NYSE:TIP) currently trades about 18% lower than its 2022 highs.
July 27, 2023 | 4:23 pm
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The iShares Treasury Inflation Protected Securities (TIPS) Bond ETF (NYSE:TIP) currently trades about 18% lower than its 2022 highs. The PCE inflation data will be crucial in confirming whether the ongoing disinflation trend remains well-defined across various economic indicators.
The PCE inflation data is a key indicator of the economic health and can influence the Federal Reserve's decisions on interest rates. This, in turn, can impact the performance of inflation-protected securities like TIP. If the PCE inflation data confirms the ongoing disinflation trend, it could potentially impact the performance of TIP. However, it's also important to note that TIP's performance is influenced by a variety of factors, not just inflation data.
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