Bloomberg Surveillance
Bloomberg Surveillance: Dana Peterson
Feb 9, 2024
Dana Peterson, Conference Board Chief Economist, discusses inflation expectations, the labor market, geopolitical climate, and consumer sentiment with Bloomberg journalists. Topics include trading experience with Schwab Trading, Federal Reserve's focus on PCE inflation, indicators for wage growth and inflation, and Fed rate cuts and consumer confidence.
07:20
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Quick takeaways
- The Federal Reserve is closely monitoring factors such as home prices, used car prices, and wage increases to ensure sustained inflation below its 2% target.
- Consumer and CEO confidence, driven by the belief that inflation is not rising quickly and optimism about lower interest rates and the stock market, contribute to a positive economic outlook.
Deep dives
Inflation Concerns and Fed's Focus on PCE Inflation
The podcast discusses the Federal Reserve's focus on Personal Consumption Expenditures (PCE) inflation as opposed to Consumer Price Index (CPI) inflation. While the CPI is showing signs of easing and aligning with PCE inflation, the Fed remains cautious and wants to ensure sustained inflation below its 2% target. They are closely monitoring factors such as home prices, used car prices, and wage increases, which could have an impact on inflation. The Fed believes that stable inflation is consistent with wages rising at a pace of around 3.5%. Overall, the Fed's focus on PCE inflation and their desire for more data before making any decisions on rate cuts is driven by the need for sustained inflation at or below their target.
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