📊 Will the core PCE data change the Federal Reserve's policy direction?

Those who have been paying attention to U.S. inflation recently should know that the core PCE annual rate has remained stable at around 2.7% for the past six months. Bank of America economists point out that if the month-over-month growth continues at 0.3% for the next two months, the Federal Reserve may reassess its policy path.

Although the market generally expects a 25 basis point rate cut in December, I want to remind everyone: don't be too optimistic!

💡 The Federal Reserve's rate cut is likely to be only "symbolic," as strong economic activity and persistent inflation pressures will make this rate cut cycle short enough that one won't have time to be "happy" 😂.

💬 My analysis:

1️⃣ The core PCE may seem like an economist's indicator, but it actually hits consumer confidence and the cost of living directly. If the data remains high, it indicates that the pressure on our wallets is still there ~ 💸

2️⃣ The Federal Reserve's policy adjustments are often lagging behind market reactions. Even if there are rate cuts, it takes time for them to transmit to the stock market or consumer market. Be cautious about chasing gains in the short term; for long-term investment, fundamentals still matter.

3️⃣ The current market is in a Thanksgiving mode, with little volatility, which is suitable for reviewing one's investment strategy. A rate cut may not necessarily be a turning point; the PCE is the signal light to see the future 🚦.

📝 Summary:

This week's inflation data will be crucial; the direction of the PCE will determine market expectations. If you are planning your investment direction for next year, it might be wise to pay more attention to this indicator — it directly affects our returns! 💡

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