Fed's Preferred Inflation Gauge Due Wednesday
The Federal Reserve's main inflation measure is scheduled for release on Wednesday, with price pressures expected to persist alongside continued consumer spending.
By BBCorp
What happened
The inflation measure the Federal Reserve watches most closely is due for release on Wednesday.
Expectations ahead of the release point to ongoing price pressures, while consumers are seen continuing to spend despite those pressures.
Why it matters
The Fed's preferred inflation gauge is one of the inputs policymakers weigh when setting interest rates. Readings that differ from what markets expect can shift assumptions about the path of policy, and those assumptions feed through to the dollar, to Treasury yields and to the valuation of equities.
Gold is typically sensitive to changes in real yield and dollar expectations because it pays no income. Crude oil and crypto also react to shifts in the broader risk and liquidity backdrop, while the spending side of the report offers a read on household demand.
What to watch
The release of the Fed's main inflation measure on Wednesday, including the accompanying consumer spending figures, and any commentary from Federal Reserve officials that follows.
Markets in play
- USDExposure: HighThe dollar tends to reprice against shifting expectations for Federal Reserve policy after key inflation data.
- GoldExposure: HighGold is sensitive to changes in rate and real yield expectations driven by US inflation readings.
- US stocksExposure: MediumEquity valuations respond to the rate path implied by inflation data and to signals on consumer spending.
USD
Gold