US PCE Inflation: US Economy Flashing A Stagflation Warning
US consumers pulled back sharply in July while inflation stayed stuck well above target, a combination the CEO of global financial advisorydeVere Group says investors are not taking seriously enough.
New Commerce Department data released today shows inflation adjusted consumer spending was flat in July, a sharp slowdown from a 0.4% gain in June.
At the same time, the Personal Consumption Expenditures (PCE) price index, the gauge the Federal Reserve uses for its 2% inflation target, held its annual rate at 3.7%, above the 3.6% economists had forecast.
Core PCE, which strips out food and energy, came in at 3.3% annually.
AdvertisementNigel Green says the combination puts the Federal Reserve in a genuinely difficult position heading into its next decision.
The Fed's target range currently sits at 3.50% to 3.75%, and its next rate decision lands on 16 September. Ahead of today's inflation data, futures markets were already leaning toward a hold rather than a cut or a hike.
Nigel Green says this report makes a hold even more likely, but for the wrong reasons.
He says the flat spending figure deserves more attention than it is getting.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment