Inflation Slowed, Fed Rate Hike Expectations Changed

Inflation data in the U.S. fell short of expectations, weakening the likelihood of a rate hike by the Fed in October. Goldman Sachs announced that it no longer sees a rate increase as likely for October and has postponed the second rate hike to December. Economists expect the core Personal Consumption Expenditures (PCE) price index to show a year-over-year increase of 3% in the fourth quarter. This forecast is below the median projection of 3.4% from FOMC members. Analysts at the Bank of Montreal noted that the BEA's annual data revisions indicated a larger-than-expected downward adjustment in the inflation measure preferred by the Fed. In August, the annual increase in core PCE fell to 3%, remaining below the market expectation of 3.3% and the Fed's prediction of 3.2%. The stable growth of the economy and employment has reduced the urgency for a new rate hike in October. However, inflation remains above the Fed's target of 2%. The yield on the U.S. 10-year Treasury bond rose to 5.29%, reaching its highest level since 2007. Household data shows that personal incomes increased by 0.2% in August, while personal consumption expenditures rose by 0.9%. Peter Schiff predicted that the personal savings rate has dropped to 4.1%, which could provide an advantage for Democrats in the midterm elections. Recent data indicates that the slowdown in inflation has eased expectations for new rate hikes. However, rising bond yields may continue to exert pressure on Bitcoin.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.