The Inflation Perfectionists
Notes on the Week Ahead
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The Fed's Expectations for Inflation
We expect the June PCE data due out this Friday, which shows seasonally adjusted increases of 1-10th per percent month over month and 3.0% year over year compared to 0.2% and 3.1% in the CPI data released on July 12. The Fed is unlikely to cut rates this year unless the economy falls into a significant recession. For 2024, the Fed's dot plot currently shows the federal funds rate falling by 1%. However, this pace of rate cuts may understate the Fed easing in 2024.
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