Fed's preferred inflation rises 0.5% in September and is in line with forecasts
US consumer spending index comes out equal to the FactSet consensus, with an annual increase of 3.6% overall and 3.1% in the core.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 2 MIN
The United States consumer spending index, known as PCE, rose 0.5% in September compared to August and advanced 3.6% year-on-year, according to InfoMoney. The two numbers came out exactly the same as the FactSet consensus forecasts, which removes the surprise effect from the data.
The PCE is the Fed's preferred inflation measure, the American central bank, and is therefore closely monitored by those trying to anticipate the next steps in monetary policy. The announcement was made by the US Department of Commerce on Thursday, the 29th.
In the section that excludes food and energy, the so-called core PCE rose 0.3% in September compared to August and reached 3.1% in the annual comparison. The FactSet consensus predicted exactly these two percentages, so the core also did not deviate from expectations.
In general, a reading in line with forecasts weighs less on the markets than a result that is not expected, because much of the movement is already embedded in the prices. Still, with inflation at 3.6% for the year and 3.1% at the core, the data keeps the issue at the center of the discussion about the path of interest rates in the United States.
For the editorial line of this newspaper, which defends fiscal responsibility and free markets, the view is that the predictability of rules and discipline with public spending help to anchor expectations. This is an opinion on the scenario, not a prediction for Fed policy.
What changes for the investor
For those who operate the stock market, Nasdaq, interest rates and the dollar, the main effect of a PCE in line with consensus is the absence of surprises. Future interest and exchange rates tend to react more to the difference between data and expectations than to the number itself, so that the disclosure confirms the scenario already priced without changing the account abruptly. Anyone who follows the Fed should now look at what the central bank says about interest rates, because the index, in isolation, does not indicate the direction of monetary policy. This article does not provide a purchase or sale recommendation or price projections.
Automatically translated from Portuguese.
