On Friday, the Fed’s favored measure of inflation PCE will be released with expectations of:
- Core PCE, est 0.2% vs 0.2% last month
- PCE headline, Est 0.1% vs 0.2% last month
- Core PCE YoY, Est 2.7% vs 2.6% last mont
- PCE headline, Est. 2.3% vs 2.5% last month
That will be important as the Fed members and the markets debate 25 or 50 at the next meeting. The Fed’s dot plot has penciled in 50 bps of cuts this year (is it 25 bps in November and December or 50 bps in December?).
The market meanwhile now sees sees a 50-50 chance for 50 bps in November.
The PPI and CPI data pieces already released, is reportedly tilting the bias for the PCE more toward 0.1% vs 0.2% or 0.3%.
Why is it important?
The 3-month average of the headline PCE is 0.1%. The core PCE 3-month average is 0.17%. A 0.1% number for both would tilt those averages even lower and keeps an annualized number less than 2%. If the Fed is intent on recalibrating the Fed target to the neutral rate, that might kickstart the Fed to get there quicker.
That data is on Friday.
On Thursday, it is about Fedspeak along with some economic data.
The key economic data would include:
- Durable goods orders with expectations of a -2.8% decline for the month, but coms after a 9.8% rise last month. Core durable goods are expected at 0.1% vs -0.2% last month.
- Initial jobless claims will be released as well after falling to 219K last week (lowest since May 2024). The expectatons is for 224K.
- Final GDP for 2Q will also be released with 3.0% expected vs 3.0% in it’s last release.
On the Fedspeaker calendar, there are some events which are attracting a few Fed speakers (i.e. a fireside chat with a couple officials). Although the topics may not be focused on the economy or Fed policy, there always are the possibility for question and answer sessions.
Who is scheduled and when?
- 9:10 AM ET: FOMC member Collins
- 9:10 AM ET: FOMC member Kugler
- 9:15 AM ET: FOMC member Bowman
- 9:20 AM ET: Fed Chair Powell
- 9:25 AM ET: FOMC member Williams
- 10:30 AM ET: FOMC Barr
- 10:30 AM ET: FOMC Cook
- 1:00 PM ET: FOMC Barr (again)
- 1:00 PM ET: Fed Pres. Kashkari
- 6:00 PM ET: FOMC Cook