PCE price index yy
Inflation and consumption are on the agenda today with the September US PCE report coming up at the bottom of the hour.
There is good reason to think that the PCE price index will overshoot the +3.4% y/y and +0.3% m/m consensus. In yesterday’s GDP report, the headline deflator at 3.5% was much higher than the 2.5% expected. Assuming economists are on the same page, that should be seen in the PCE report as well.
Notably though, the more-important core PCE reading in the GDP report was slightly below the consensus. The expectation for today’s PCE core is +0.3% m/m and +3.7% y/y.
Another skew could be in consumption where strong US consumer spending also helped to boost GDP. The consensus on personal spending is +0.5%.
I would think many market participants have factored all this in but — if anything — hot headline and consumption numbers should lead to USD strength, bond selling and softer equities.