We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • #Crypto update: $BTC -2% $BCH -3% $LTC -2.7% $XRP -2.9% $ETH -2%
  • President Trump: We're doing very well on #USMCA, hearing from unions that it is looking very good $USDCAD $USDMXN
  • US Dollar Returns to Resistance Ahead of CPI, FOMC https://www.dailyfx.com/forex/fundamental/article/drivers_of_price_action/2019/12/09/us-dollar-holds-key-resistance-ahead-of-cpi-fomc-usd-price-chart-js56.html https://t.co/tcJR97ZjxZ
  • Poll: Volatility levels are exceptionally low across the financial system and activity is mean reverting. Also worth noting volatility and risk assets (like the Dow) move inversely to each other. When do you think volatility will 'normalize' (likely explode, then settle higher)?
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Silver: 0.13% Oil - US Crude: 0.01% Gold: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/YiXXwwfBML
  • Senate Finance Committee Chairman Grassley spoke with USTR's Lighthizer on Monday about #USMCA and is hopeful a deal announcement can come soon $USDCAD $USDMXN
  • The #Dow Jones has rallied more than 25% in the year-to-date, easily recouping losses from last winter. Get your market update from @PeterHanksFX here:https://t.co/iwTMNbWq7S https://t.co/PWFYVH90i9
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.95%, while traders in US 500 are at opposite extremes with 76.85%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/XmQ5X9mG3U
  • I'm keeping this visual marker of the US-China December 15 deadline for the former increasing the tariff list on the latter if no deal is struck. $USDCNH https://t.co/ryK4BeXyCI
  • My fears of that impending December 15th tariff escalation are not soothed... https://t.co/3RLJx3mWDz
Federal Reserves Favored Inflation Indicator Fails to Please

Federal Reserves Favored Inflation Indicator Fails to Please

2016-02-02 00:06:00
Varun Jaitly,
Share:

Talking Points:

  • PCE comes in little changed going into 2016 as rate hike regime begins
  • Fed focusing on inflation data as employment remains strong
  • Personal spending fails to grow in December as income growth remains steady

What are the Traits of Successful Traders? See what our studies have found to be the most common pitfalls of retail FX traders

The Federal Reserve’s favored inflation measure suggests limited inflation growth amid the beginning of a tightening cycle. The month over month inflation number came in at 0.0% change, while the year over year figure came in as expected at 1.4% growth. Despite the limited inflation change, personal income grew by 0.3%, as expected. Personal spending was unchanged versus last month’s 0.5%. The last month in which personal spending came in at 0% was October.

US household consumption accounts for roughly 70 percent of GDP according to World Bank data. Due to the size of the US consumer base, data such as personal income and personal spending are important factors for gauging growth. Where income growth has kept pace, personal spending has stalled and reflects the lulls of previous years. These pressures would add another issue for the Federal Reserve to deal with, as they continue to tighten.

The inflation data derived from today’s data carries significance in context of the current monetary environment the Federal Reserve finds itself in. The Fed is one of the only major central banks that has initiated a rate hike with the prospect of further hiking. In contrast, banks such as the ECB and BoJ are looking to further ease their monetary base. With PCE being one of the major indicators for policy considerations in the Fed ‘dual mandate’, tepid inflation could suggest a far less aggressive tightening path for the Fed.

After today’s PCE data release, Federal Reserve’s Stanley Fischer gave a speech regarding the cautionary tone the Fed is taking as more central banks embrace negative interest rates. His focus on the inflation rate was noted as he further articulated that the Fed would like to see inflation rise to productive and sustainable levels. These data points will carry more weight moving forward as the Fed heads for its next rate gathering on March 16th.

Federal Reserves Favored Inflation Indicator Fails to Please

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.