Fed's Favorite Inflation Gauge Expected To Fall In September: How Will Markets React?
Portfolio Pulse from Piero Cingari
The Federal Reserve's preferred inflation measure, the PCE price index, is expected to show a decline in September, reinforcing the disinflationary trend. This could support expectations for continued Fed rate cuts in 2024 and 2025. Market reactions will depend on whether the data meets expectations, with potential positive impacts on stocks and declining bond yields if inflation is controlled.
October 30, 2024 | 8:37 pm
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POSITIVE IMPACT
The Invesco QQQ Trust (QQQ) may experience positive movement if the PCE data supports the disinflationary trend, aligning with expectations for Fed rate cuts.
A confirmation of the disinflationary trend through the PCE data would likely boost tech-heavy indices like QQQ, as lower interest rates are generally favorable for growth stocks.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) could see positive movement if the PCE data confirms a disinflationary trend, supporting expectations for Fed rate cuts.
If the PCE data aligns with expectations, it would reinforce the disinflationary trend, likely leading to positive sentiment in the stock market. SPY, representing the S&P 500, would benefit from this sentiment as investors anticipate continued rate cuts.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80