Well written, thank you! But wouldn't you think the PCE on Friday already puts the FOMC hawkish narrative at risk? I mean, couple of things to note...
The market is now pricing LESS than 2 cuts for next year, the FED said two, market overreaction? I think so.
Now the PCE gives market again some hopes that inflation is not necessarily going to head back higher? I think so.
And most of all... non conventional thought but...
The FED timing recently hasn’t been impeccable either, they cut 50bps in September right before three consecutive months of sticky inflation prints, wouldn’t be a surprise if they pivoted hawkish on Wednesday right before a resumption of the disinflationary trend?
I don’t see PCE as a risk to the hawkish narrative at all. I like to focus on overall data points rather than one specifically, the continuous sticky core CPI prints at 0.3% is more alarming to me than one PCE print.
The market in my opinion isn’t over reacting to what the Fed have said, I think they’re more so reacting to how large the rate differentials will be in comparison to Eurozone / Canada etc.
I think you’re right in the fact that they cut too large too early, to then do nothing after with stickier inflation.
Well written, thank you! But wouldn't you think the PCE on Friday already puts the FOMC hawkish narrative at risk? I mean, couple of things to note...
The market is now pricing LESS than 2 cuts for next year, the FED said two, market overreaction? I think so.
Now the PCE gives market again some hopes that inflation is not necessarily going to head back higher? I think so.
And most of all... non conventional thought but...
The FED timing recently hasn’t been impeccable either, they cut 50bps in September right before three consecutive months of sticky inflation prints, wouldn’t be a surprise if they pivoted hawkish on Wednesday right before a resumption of the disinflationary trend?
Would love to know your thoughts.
Thank you.
I don’t see PCE as a risk to the hawkish narrative at all. I like to focus on overall data points rather than one specifically, the continuous sticky core CPI prints at 0.3% is more alarming to me than one PCE print.
The market in my opinion isn’t over reacting to what the Fed have said, I think they’re more so reacting to how large the rate differentials will be in comparison to Eurozone / Canada etc.
I think you’re right in the fact that they cut too large too early, to then do nothing after with stickier inflation.
Enjoy the holidays!