As the dollar’s slip continues to impact the markets, investors are closely watching the reaction in commodities such as gold and silver. With a busy week ahead that includes the Federal Reserve meeting and the U.S. presidential election, there is no shortage of economic updates to keep an eye on.
One key factor influencing market sentiment is the latest PCE inflation report from the Commerce Department. In September, the PCE index saw a modest 0.2% increase in prices, in line with expectations. Year-over-year, the index rose by 2.1%, the smallest annual increase since early 2021. When excluding food and energy prices, core PCE increased by 0.3% for the month and 2.7% annually, highlighting the Fed’s target of 2% inflation.
Analysts are now speculating on the Fed’s next move, with many expecting a 25-basis-point rate cut in the upcoming meeting. This comes after the Fed initiated a policy easing cycle in September with a significant half-percentage-point reduction.
However, some experts are sounding a note of caution about the potential for a re-acceleration of inflation. Michael Landsberg of Landsberg Bennett Private Wealth Management predicts a gradual increase in inflation through late 2024, suggesting that the Fed may cut rates in November but pause in December if inflation persists.
Similarly, Peter Cardillo of Spartan Capital Securities points to elevated core inflation and strong consumer spending as factors that could influence the Fed’s decision on future rate cuts. As third-quarter GDP data shows resilient consumer spending, concerns about inflation are heightened.
With all eyes on the Fed meeting and the economic landscape shifting, investors should stay informed and agile in their trading strategies. Keep an eye on Extreme Investor Network for the latest insights and analysis to navigate the ever-changing market conditions.