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Vote 50
Ask and you shall receive.
America's fiercely independent, proudly apolitical central bank was blessed Friday with the benign core PCE print they needed to justify a second straight 50bps rate cut. That half-point move is "scheduled" for delivery less than 48 hours after Americans choose a president at the ballot box in November, and around 60 days before Americans decide on a president at Gettysburg in January. (I'm just kidding. Hopefully.)
The unrounded, MoM core PCE print for August came i
Given the Fed’s desire to be as apolitical as possible, I don’t blame them for over communicating the amount of the next interest rate move. The move is now in front of (and not behind) the election.
Looking at the months that will drop out of the L12M sample, at current MOM, core PCE YOY will take a step down next month (when Sep 2023’s 0.3% MOM drops out) and another step down in 1Q (when Jan 2024’s 0.5% MOM drops out).
If MOM stays 0.150% or lower, then by end 1Q25 core PCE YOY should be under 2%.
If MOM is 0.165%, then in 2Q core PCE YOY should be appx 2%.
Revised consumer income, savings, etc data argues against 50.