Core Viewpoint - The Federal Reserve's decision-makers, particularly those concerned about core PCE deviating from the 2% target, are likely to support a "insurance rate cut" only if the August non-farm payroll data, to be released on September 5, shows further weakness [1] Group 1 - The average job growth in the U.S. over the past three months is currently only 35,000 [1] - Chris Weston from Pepperstone indicates that the Fed's credibility is under significant pressure [1] - A rate cut in September, while core PCE is expected to exceed the target by 100 basis points, would be a challenging decision in any environment [1] Group 2 - It remains unclear whether the effects of tariffs will gradually become apparent [1]

Core Viewpoint - The U.S. job growth average over the past three months is only 35,000, leading to concerns about the Federal Reserve's credibility and potential for an "insurance rate cut" if the August non-farm data, to be released on September 5, shows further weakness [1] Group 1 - The Federal Reserve decision-makers, particularly those worried about core PCE deviating from the 2% target, may support a rate cut if the upcoming employment data is weak [1] - The core PCE is expected to exceed the target by 100 basis points, making a rate cut in September a challenging decision under any circumstances [1] - There is uncertainty regarding whether the effects of tariffs will gradually become apparent [1]

Group 1 - The U.S. Personal Consumption Expenditures (PCE) price index increased by 0.3% month-on-month and 2.6% year-on-year in June, indicating a rise in inflation [1] - The core PCE price index, excluding food and energy, also rose by 0.3% month-on-month and 2.8% year-on-year, with the year-on-year increase remaining unchanged from May [1] - Consumer spending and personal income both grew by 0.3% month-on-month in June, while the personal savings rate stood at 4.5% [1] Group 2 - The increase in prices for various imported goods, including furniture and appliances, was noted, with furniture prices rising by 1.3% and appliances by 1.9% month-on-month [1] - The Federal Reserve maintained the federal funds rate target range at 4.25% to 4.5%, with Chairman Powell indicating that premature rate cuts could fail to address inflation fully [2]

Group 1 - The core point of the article is that Federal Reserve Chairman Jerome Powell indicated a potential year-on-year increase of 2.7% in the core PCE for June, with tariffs contributing to rising prices of certain goods, while long-term inflation expectations remain aligned with the 2% target [1] Group 2 - The mention of tariffs suggests that trade policies are influencing commodity prices, which could have implications for various sectors reliant on these goods [1] - The alignment of long-term inflation expectations with the 2% target indicates a stable outlook for monetary policy, which may affect investment strategies across different industries [1]

Group 1 - The recent consumer price index (CPI) data for June shows a complex picture influenced by tariffs, with core CPI rising only 0.2% month-over-month, slightly below market expectations [1] - Core goods prices have seen a significant increase for the first time since February, particularly in household items and clothing, indicating the impact of tariffs on consumer prices [2] - Financial institutions predict that the core personal consumption expenditures (PCE) index will outperform core CPI, with expected month-over-month growth between 0.29% and 0.34%, which may reduce the likelihood of interest rate cuts by the Federal Reserve [1][5] Group 2 - Core CPI year-over-year growth increased from 2.8% to 2.9%, while core goods prices rose by 0.2%, marking the strongest performance since February 2023 [1] - The trade-weighted effective tariff rate in the U.S. has risen to 14%-15%, significantly higher than the previous year's 2.5%, with an estimated 50% of tariff costs expected to be passed on to consumers [2] - The anticipated core PCE growth of 0.34% in June is driven by stock market rebounds and rising prices in investment-related services, reinforcing the Federal Reserve's current monetary policy stance [5]

Group 1 - The core viewpoint indicates that the tariff transmission effect has begun to manifest, with June's CPI data revealing structural changes despite appearing weak on the surface [1][2][4] - June's core CPI increased by 0.23% month-on-month, slightly below market expectations, while the year-on-year rate rose from 2.8% to 2.9%, indicating a mild inflationary trend [2][4] - Core commodity prices saw a notable increase of 0.2% in June, marking the first significant rise since February, with household goods and clothing prices experiencing substantial hikes due to tariffs [2][4] Group 2 - The report highlights that household goods prices rose by 0.98%, the largest increase since January 2022, while clothing and entertainment goods also saw price increases [4] - Barclays estimates that the effective tariff rate in the U.S. is between 14-15%, significantly higher than last year's 2.5%, with about 50% of tariff costs expected to be passed on to consumers [4] - The anticipated core PCE is projected to rise by 0.34% month-on-month, driven by a rebound in the stock market and increased investment-related services, reinforcing the Federal Reserve's current policy stance [7]

Group 1 - The US dollar index DXY has decreased by 10 points, currently at 97.15 [1] - The core PCE in the US for May has risen more than expected [1]

Core Insights - The May PCE data from the U.S. is not considered a strong report from several perspectives [1] - Core PCE exceeded expectations, indicating stronger inflationary pressures [1] - Income and spending figures were weak, aligning with recent corporate commentary [1]

Economic Forecasts - The GDP growth expectations for 2025, 2026, and 2027 are projected at 1.4%, 1.6%, and 1.8% respectively, with a long-term forecast also at 1.8% [2] - The unemployment rate is expected to be 4.5% in 2025 and 2026, slightly decreasing to 4.4% in 2027, with a long-term expectation of 4.2% [2] - PCE inflation is forecasted at 3.0% for 2025, decreasing to 2.4% in 2026 and 2.1% in 2027, with a long-term target of 2.0% [2] - Core PCE inflation is anticipated to be 3.1% in 2025, dropping to 2.4% in 2026 and 2.1% in 2027, with a long-term goal of 2.0% [2] - The federal funds rate is projected to be 3.9% in 2025, 3.6% in 2026, and 3.4% in 2027, with a long-term expectation of 3.0% [2]

Group 1 - The core viewpoint indicates that gold prices have significantly increased, reaching $3430.29 per ounce with a rise of 1.33% [1][3] - The opening price for gold today was $3384.94 per ounce, with a high of $3432.70 and a low of $3379.33 [1][3] Group 2 - The U.S. inflation appears to be moving towards the Federal Reserve's 2% target, while labor data suggests a potential rise in unemployment [2] - The Producer Price Index (PPI) for May increased slightly by 0.1%, and initial jobless claims remain high at 248,000 [2] - These factors have heightened expectations for a possible interest rate cut by the Federal Reserve in early fall, with a 61% probability for a rate cut in September [2] - The two-year U.S. Treasury yield, sensitive to Federal Reserve movements, has decreased to 3.891% due to the recent data [2] - Economists predict a modest increase in the core Personal Consumption Expenditures (PCE) index for May, aligning with the Federal Reserve's inflation target [2]