Bankinter | The US Private Consumption Deflator (PCE) was in line with expectations in July: up 2.6% versus 2.6% previously. The core rate rose to 2.9% versus 2.9% estimated and 2.8% previously.
Analysis team’s view: Figures in line with expectations. The PCE stabilised after rebounding in May and June. This inflation, together with weak labour market data in recent months, supports our view of a further rate cut of 25 bps by the Fed to 4.00%/4.25% at its next meeting. However, last week GDP data was revised up three tenths to 3.3% (versus 3.0% preliminary), reflecting continued solid growth. At the same time, the following figures were published: personal income 0.4% (monthly), versus 0.4% estimated and 0.3% previously. And personal spending up 0.5% versus 0.5% estimated and 0.4% previously (revised from 0.3%).
