Inflation declines, consumer confidence remains strong💡💡💡
Friday’s rally was spurred by a drop in Powell’s favourite inflation gauge (Core PCE) to a 10-month low, with core deflator falling to 4.6% YoY and core services ex-housing down to 0.23% MoM. Furthermore, the U-Mich consumer sentiment report came in remarkably robust, with sentiment rising to 64.4, the 2nd best print all year, along with matching gains in current conditions and forward expectations. Most importantly, the 1-year inflation outlook metric dropped to 3.3% vs 4.2% in May, the lowest print since March 2021, and helping to raise the chorus of an economic soft-landing (or no-landing?) to the loudest levels all year.
