U.S. PCE inflation data shows inflation stabilizing... a green light for rate cuts
U.S. PCE inflation data shows inflation stabilizing... a green light for rate cuts later this year
January 2024, core PCE index 0.4% ... up 2.8% yoy
The US Federal Reserve's benchmark interest rate decision is driven by inflation (Personal Consumption Expenditures (PCE)) and employment data (with a focus on the unemployment rate), with PCE inflation and the unemployment rate driving the larger picture.
The U.S. Fed focuses on the central bank's mandate of price stability and prioritizes price stability over economic growth in determining monetary policy. This is a common mandate for all major central banks around the world, most of which have a target inflation rate of 2.0%.
The U.S. Fed focuses on the central bank's mandate of price stability and prioritizes price stability over economic growth in determining monetary policy. This is a common mandate for all major central banks around the world, most of which have a target inflation rate of 2.0%.
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| Bureau of Economic Analysis |
(YoY)PCE, PCE(*excluding food and energy) prices fall for 5th consecutive month ... inflation stabilizes
(MoM)PCE, PCE(*excluding food and energy prices) inflation up slightly
Year-over-year, inflation has been relatively stable and is approaching the US Federal Reserve's 2% inflation target. This raises the possibility of a rate cut later this year.
U.S., Canadian real estate markets watch... 5-year loan interest rates reset
In the U.S. and Canada, real estate loan rates are often locked into five-year fixed rates. After low rates through 2021, the U.S. and Canada are experiencing increasing pressure on lending rates as real estate loan renewals come up for renewal.
Watch for price adjustments and changes in transaction volume in the U.S. and Canadian real estate markets.
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