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Core Insights - Inflation improved in October 2025, with annual inflation at 2.7%, before rising to 2.8% in November, aligning with Wall Street's expectations [1][2] - The Federal Reserve's preferred inflation measure, the core PCE price index, showed a similar trend, with core PCE at 2.8% for September and matching estimates for October and November [2] Economic Indicators - The Federal Reserve is expected to conclude its policymaking meeting on January 28, with only a 5% chance of interest rate cuts in the upcoming vote, following a reduction to between 3.5% and 3.75% in December [3] - Fed Chair Jerome Powell indicated a likely pause on further cuts, emphasizing a "wait and see" approach regarding economic developments [3] Contextual Background - President Donald Trump claimed significant cooling of inflation, stating there was "virtually no inflation" and that he had "defeated" inflation over the past year [4] - The Federal Reserve aims for a 2% annual inflation rate, which has been exceeded for 57 consecutive months, raising concerns about the labor market and the impact of high inflation on lower- and middle-income Americans [4]

Economists expect Thursday's report to show core PCE holding at 2.8%, reinforcing policymakers' cautious stance on rate cuts. ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the U.S. economic indicators, particularly the Consumer Price Index (CPI) and new home sales, which are critical for assessing inflation and economic growth trends. Core Insights and Arguments 1. **CPI and Core CPI Performance**: - December core CPI rose by 0.24% month-over-month, which was below expectations, with a year-over-year rate of 2.64% [6][9] - Key components such as airfares (+5.2%), hotels (+3.5%), and apparel (+0.6%) showed significant rebounds after previous distortions due to shutdowns [6][8] - The rent and owners' equivalent rent components also rebounded, indicating a return to normal inflation rates after methodological adjustments [6][7] 2. **Sector Contributions**: - The communications category declined by 1.9%, contributing -7 basis points to the core CPI, while household furnishings and operations fell by 0.5%, contributing -3 basis points [6] - Notably, the software category rose by 7%, which has a significant weight in the core PCE [8] 3. **PCE Price Index Estimates**: - The core PCE price index is estimated to have risen by 0.37% in December, leading to a year-over-year rate of +2.85% [9] - The headline PCE price index is also expected to have increased by 0.37% in December, reflecting a 2.74% increase from the previous year [9] 4. **New Home Sales Data**: - New home sales increased by 1.8% month-over-month for October, reaching a seasonally adjusted annualized level of 737,000 units, which was above expectations [10] - Sales in August were revised down to 711,000 units, indicating a stronger performance in September and October than previously anticipated [10] 5. **GDP Tracking Adjustments**: - The stronger-than-expected single-family home sales led to an upward revision of the Q4 GDP tracking estimate by 0.1 percentage points to +2.2% (quarter-over-quarter annualized) [11] - The domestic final sales estimate for Q4 stands at +0.9% [11] Additional Important Information - The report emphasizes that investors should consider these economic indicators as part of a broader analysis when making investment decisions [3] - The data reflects ongoing adjustments in the housing market and inflation trends, which are crucial for understanding the economic landscape [6][10][11]

Inflation Data - U.S Consumer inflation data for August is in line with expectations [1] - Core PCE MoM actual value is 0.2%, matching the forecasted value of 0.2% [1] - Core PCE YoY actual value is 2.9%, matching the forecasted value of 2.9% [1]

the Fed and how the Fed has underscored labor. And here we go. The income, spending, and PCE numbers should be hitting the wires here.These are August numbers. Some of the Fed's favorite inflation gauges. And of course, I'll have to tap dance a bit as I don't see some of these numbers.But just as a preview, we're expecting up 3/10 on headline. And here it comes. Comes in a smidge hotter.Up 4/10 instead of up 3/10. Exactly the same at least up to this point until I see revisions equals last month. So 4/10 ba ...

Market Expectations - US PCE data is expected to be 27% [1] - Core PCE data is expected to be 29% [1] Market Impact - A bullish market is contingent on PCE and Core PCE data being lower than expected [1]

Economic Overview - Pre-market futures are improving following the release of major economic numbers, despite a drawback in EU markets due to rising unemployment and inflation in Germany [1] - U.S. indexes are experiencing volatility, with the small-cap Russell 2000 showing gains while other major indexes remain in the red [1] PCE and Inflation Metrics - July Personal Consumption Expenditures (PCE) figures were in-line with expectations, indicating no hindrance to the anticipated 25 basis point rate cut for the September Fed meeting [2] - Personal Income for July increased by 0.4%, the strongest since April, while Personal Spending rose by 0.5%, marking the highest increase since March [3] - The headline PCE Index showed a month-over-month increase of 0.2%, the lowest since May, with a year-over-year increase of 2.6%, consistent with the previous month [4] - Core PCE, excluding food and energy, increased by 0.3% month-over-month and 2.9% year-over-year, indicating stability in inflation metrics [5] Employment and Economic Indicators - Fed Chair Jerome Powell's focus has shifted from inflation to employment concerns, with July's non-farm payrolls showing an increase of 73K, which is below the previous four-month average of 54K [8] - A significant upward revision in PCE would be necessary to alter the current outlook, as weakening employment is influencing the decision for a rate cut [9] Trade and Inventory Data - Advanced Trade in Goods for July reported a deficit of $103 billion, which was more than $10 billion lower than anticipated [10] - Advanced Retail Inventories and Wholesale Inventories both reported a month-over-month increase of 0.2%, indicating stable inventory levels [11] Market Expectations - The upcoming week will feature new jobs reports, including July JOLTS numbers and private-sector payrolls from ADP, leading up to the significant BLS non-farm payrolls report [12]

Inflation Trends - US core PCE price index annual rate increased to 2.9%, the highest since December 2024 [1] - Core PCE monthly rate was 0.3%, compared to the previous 0.1% [1] - Overall PCE annual rate was 2.6%, with a monthly rate of 0.2% [1]

REMINDER:U.S. PCE & Core PCE today at 8:30 AM ET.As the Fed’s preferred inflation metric, this print will be closely watched.Consensus:- PCE: 2.6%- Core PCE: 2.9% https://t.co/qlBNxjhvJx ...