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Key Economic Shifts Expected by September 30
The Federal Reserve, led by Chair Jerome Powell, is expected to pivot from its current monetary policy, with a potential interest rate cut looming. Key indicators suggest an economy showing signs of weakness, including slowed job growth and reduced housing purchases. The latest Personal Consumption Expenditures (PCE) report revealed a 0.2% increase in July, with an annual increase of 2.6%, indicating that inflation is not as dire as previously anticipated, which may encourage the Fed to ease its rate hikes.
Consumer spending rose by 0.5% in July, despite a 0.1% decline in food prices and a 1.1% decrease in energy costs. However, core PCE, the Fed’s preferred inflation measure, increased to 2.9% annually. With upcoming job and Consumer Price Index (CPI) reports, these data points will likely influence the Fed’s decision on whether to cut interest rates at its next meeting.
Economists anticipate that the economic landscape will shift dramatically by the end of September, potentially unleashing what has been termed the “Trump Shock,” where a significant influx of capital may impact select stocks favorably.
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