The Core PCE Price Index, one of the Fed’s preferred inflation indicators, measures the change in the price of goods and services purchased by consumers, excluding food and energy due to their significant volatility.
The Bureau of Economic Analysis is scheduled to release the Core Personal Consumption Expenditures (PCE) Price Index m/m on Friday, July 28, 2023 at 4:30 PM, GMT+4 (Dubai Time). The market anticipates a decline from a previous 0.3% to an expected 0.2%.
A higher-than-expected figure would signal the presence of inflationary pressures in the economy. This could potentially give more room for the Fed to continue raising the interest rate to push inflation down to the desired 2% rate and potentially cause the U.S. Dollar to appreciate in value.
Conversely, if the figure comes in below expectations, this would indicate a reduction in inflationary pressures within the economy. As a result, this would likely increase the expectations for the Fed to skip rate hikes in the upcoming interest rate decision, likely depreciating the U.S. Dollar’s value, according to analysts.
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