Latest / Markets with Megan: A Quick Financial Markets Update / Milestone Episode: Lowest Inflation Rise Since November 2020 | Episode 150 | 06-28-24

Transcript

Milestone Episode: Lowest Inflation Rise Since November 2020 | Episode 150 | 06-28-24 · Markets with Megan: A Quick Financial Markets Update

• 0:01
  Megan Horneman: It's the 150th episode of Markets with Megan.
• 0:04
  Megan Horneman: I just want to thank everybody who's tuned in and listened to our regular economic updates and talking about the markets.
• 0:09
  Megan Horneman: Again, if you have any questions or comments on how we can improve the podcast, please feel free to reach out to podcasts at verdence.
• 0:16
  Megan Horneman: com.
• 0:16
  Megan Horneman: But let's dig into what we got this morning, which was the Fed's preferred inflation indicator, and that is core PCE.
• 0:23
  Megan Horneman: What we saw this morning was good news.
• 0:26
  Megan Horneman: Inflation was up 0.1% and that's what the expectation was for the inflation reading.
• 0:32
  Megan Horneman: But when you actually go down two decimal places, it's 0.08, which is the lowest month-over-month reading we've gotten for core PCE since November of 2020.
• 0:43
  Megan Horneman: So this is definitely good news for the Federal Reserve.
• 0:46
  Megan Horneman: This gives them a little bit of breathing room here.
• 0:50
  Megan Horneman: We came all the way from being up this year in January of being up five-tenths of a percent on a month-over-month basis.
• 0:57
  Megan Horneman: So getting down to this almost unchanged on a month-over-month basis is what the Fed wants to see Now.
• 1:03
  Megan Horneman: On a year-over-year basis, inflation is still rising 2.6%.
• 1:07
  Megan Horneman: It is a little bit better than last month's year-over-year reading, which was 2.8%.
• 1:12
  Megan Horneman: So we're getting closer to the Fed's 2% target.
• 1:16
  Megan Horneman: We still think September, while the odds of a rate cut in September have increased a lot with this data.
• 1:21
  Megan Horneman: We still think it's a little early to say September.
• 1:23
  Megan Horneman: You can remember that they have a dual mandate.
• 1:27
  Megan Horneman: It's inflation has to get down to their 2% target and they've made it clear they don't have to wait until that's exactly hit 2%.
• 1:33
  Megan Horneman: But they also have to have maximum employment and we're still seeing a labor market that's holding in there pretty well.
• 1:40
  Megan Horneman: We've seen some modest increase in the unemployment rate, but not anything where the Fed can say, okay, we're all as good, we can go ahead and cut interest rates.
• 1:48
  Megan Horneman: We still think this is an end of the year story for interest rate cuts, but we're watching the data, just like the Federal Reserve, and we'll continue to monitor what's going on from not just the personal spending but also manufacturing, some of these things that have been under pressure to see if a September rate cut is more likely.
• 2:06
  Megan Horneman: That's all we have today in this week.
• 2:08
  Megan Horneman: We'll be back next week with a bunch of more economic data.
• 2:11
  Megan Horneman: Remember, it's a jobs week next week as well.
• 2:13
  Megan Horneman: It's also a shortened holiday week, but we will be back with some economic data for you.
• 2:17
  Megan Horneman: If you have any questions or comments, you know where to reach us.
• 2:19
  Megan Horneman: Thank you.