Yesterday’s strong round of economic data was something of a gamechanger as it woke up the market to the possibility of a hotter US economy and the inflation that could come with it.
Today we get a look into the consumer and prices with the August PCE report. The consensus is 2.7% on the headline and 2.9% on the core. I think the 0.1 pp increments matter here as the market is iffy about two cuts this year (pricing at 60%). I think the market has a pretty good handle on August inflation from the data already released but less clear is the strength of the consumer. There was a big upgrade in Q2 GDP based on consumer spending and we will want to see if that continues in the personal consumption number, which is expected at +0.5%.
For more, see the economic calendar.
