Fed’s Favored Price Gauge Rises at Mild Pace, Spending Holds Up
Jul 26, 2024
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Mike McKee, an International Economics & Policy Correspondent, analyzes recent PCE data and its implications for Fed policy. Jamie Tarabay, a Cybersecurity Reporter, discusses heightened cyber threats to France's rail networks amid the Olympics. Felix Gillette, the Media & Entertainment Editor, highlights Joe Rogan's thriving Texas comedy scene post-California. The conversation also touches on corporate diversity initiatives and political endorsements for Kamala Harris, emphasizing strategies for engagement as elections approach. A fascinating blend of economics, security, and cultural shifts!
Recent PCE data indicates a mild rise in inflation, providing reassurance to the Federal Reserve about current economic stability.
Despite strong consumer spending, consumer sentiment has plummeted due to external factors, reflecting a disconnect between economic data and public outlook.
As the Paris Olympics approach, French authorities are enhancing cybersecurity measures in response to recent threats to their transportation infrastructure.
Deep dives
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Trends in US Inflation and Consumer Spending
Recent data indicates that core PCE, a key measure of underlying US inflation, rose modestly, suggesting a controlled rate of inflation that officials are keen to maintain. Consumer spending remains strong, which is a positive development for the economy as officials aim to cool inflation without causing a recession. The core PCE data, which excludes volatile food and energy prices, indicates inflation is steadily moving in the desired direction, providing assurance to markets and Federal Reserve officials. Positive consumer behavior contributes to overall economic stability, as reflected in rising stock indices.
Consumer Sentiment Amidst Economic Trends
Despite signs of improving economic indicators, consumer sentiment has dropped to its lowest level in eight months, signaling widespread concern among shoppers. Ongoing struggles with high price levels, compounded by recent geopolitical tensions and domestic issues, contribute to this negative perception. The decline in consumer mood is attributed in part to external factors such as political unrest, which diminishes confidence across demographics. Thus, even with positive spending trends, there remains a disconnect between economic data and consumer outlooks.
Potential Risks of Economic Contraction
While current indicators suggest a stable economy with sustainable growth, there are underlying fears about a possible economic contraction. Analysts are divided on the outlook, with some suggesting that rising unemployment rates, a result of increased labor force participation, could signify a looming recession. However, it is also possible that this uptick in unemployment does not reflect layoffs but rather a healthier labor market. As such, the Fed's role is crucial in navigating this landscape, with interest rate adjustments serving as a tool to maintain economic growth while addressing inflation.
Olympics Under Cybersecurity Threat
As the Paris Olympics approach, the event faces significant security concerns, including a recent cyber attack disrupting the country's transportation infrastructure. French authorities have heightened their security measures in anticipation of potential threats aimed at undermining the games, a huge global spectacle. Enhanced cybersecurity measures are now being implemented, with the French cybersecurity agency working closely with Olympic organizers on threat assessments. The stakes are high as the Olympics symbolize international unity, making them a prime target for cyber disruptions.
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg News International Economics & Policy Correspondent Mike McKee breaks down Friday's PCE data and what it means for Fed policy. Bloomberg News Cybersecurity Reporter Jamie Tarabay reports on an attack on France's super-fast rail network as the Summer Olympics get underway in Paris. Bloomberg Businessweek Media & Entertainment Editor Felix Gillette shares the details of his Businessweek story Joe Rogan Builds a Texas Comedy Empire After Fleeing California. Daryn Dodson, Managing Partner at Illumen Capital, talks about working to achieve racial and gender equity across investing. Adrianne Shropshire, Executive Director of BlackPAC, discusses the political action committee endorsing VP Kamala Harris as the Democratic nominee for President. And we Drive to the Close with Lance Cannon, Portfolio Manager at Hood River Capital Management. Hosts: Tim Stenovec and Emily Graffeo. Producer: Paul Brennan.
