Nomura – The Week Ahead
Inflation Moderation?
May 24, 2024
Australia, Europe, US, and China economists review market drivers. Focus on US core PCE inflation data influencing markets. Topics include Fed's rate maintenance, euro area inflation, China PMI, and Asia's economic reports.
15:01
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Quick takeaways
- Fed considers maintaining higher rates if inflation doesn't reach 2% sustainably, delaying expected interest rate cuts.
- US core PCE inflation data suggests slower growth, potentially delaying Fed's easing cycle to September.
Deep dives
The Fed's Approach to Inflation and Rate Decisions
The Fed discussed the possibility of maintaining higher rates if inflation did not reach the 2% target sustainably. They anticipated a gradual decline in inflation towards the target in the medium term, despite recent data suggesting a longer timeline than expected. These developments did not bolster confidence for interest rate cuts.
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