{"id":25896,"date":"2024-07-27T17:00:32","date_gmt":"2024-07-27T14:00:32","guid":{"rendered":"https:\/\/coinengineer.io\/?p=25896"},"modified":"2024-07-27T14:16:43","modified_gmt":"2024-07-27T11:16:43","slug":"us-inflation-data-signals-potential-fed-rate-cut","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/us-inflation-data-signals-potential-fed-rate-cut\/","title":{"rendered":"US Inflation Data Signals Potential Fed Rate Cut"},"content":{"rendered":"<p>Recent US inflation data has sparked speculation that the Federal Reserve may be poised to cut interest rates as soon as its September meeting.<\/p>\n<p>A report released by the US Commerce Department on Friday indicated a slight slowdown in consumer spending last month. The easing price pressures and cooling labor market could bolster the Fed&#8217;s confidence that inflation is moving towards its 2% target.<\/p>\n<p>The Personal Consumption Expenditures (PCE) price index, the <a href=\"https:\/\/coinengineer.net\/blog\/experts-expect-two-rate-cuts-from-the-fed-in-2024-reuters-survey\/\">Fed&#8217;s<\/a> preferred inflation gauge, rose 0.1% in June, following a flat reading in May. This suggests that inflationary pressures may be easing.<\/p>\n<p>&#8220;The key question now is whether the positive momentum we&#8217;ve seen over the last three months will continue through to the September meeting,&#8221; said Olu Sonola, chief US economist at Fitch Ratings. &#8220;While the Fed will have one eye on recent labor market developments, it&#8217;s likely to use the upcoming meeting to set the stage for a rate cut in September.&#8221;<\/p>\n<p>Kathy Bostjancic, chief economist at Nationwide, noted that the improving inflation data suggests that the surge in inflation seen in the first quarter was transitory. &#8220;Moreover, if rent inflation has finally peaked as the latest data suggests, then inflation appears to be returning to a more sustainable downward trend,&#8221; she said.<\/p>\n<p>As demand in the economy has cooled in response to the Fed&#8217;s aggressive monetary policy tightening in 2022 and 2023, the pace of economic growth has slowed. While the economy grew at an average annual rate of 2.1% in the first half of this year, it expanded at a 4.2% pace in the second half of 2023.<\/p>\n<p>Economists at Bank of America Securities estimate that approximately $400 billion of excess savings accumulated during the COVID-19 pandemic remains, but at the current pace of depletion, it could be exhausted by the end of the year.<\/p>\n<p>&#8220;Elevated savings have been supporting consumer spending and likely encouraged more saving for precautionary reasons,&#8221; said Veronica Clark, an economist at Citigroup. &#8220;But overall spending seems to be slowing more than income, which is consistent with lower saving. Conversely, a very low savings rate could signal the risk of a sharper decline in spending as the labor market weakens.&#8221;<\/p>\n<p><em>In the comment section, you can freely share your comments about the topic. Additionally, don\u2019 t forget to follow us on\u00a0<a href=\"https:\/\/t.me\/coinengineernews\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>Telegram<\/strong>,\u00a0<\/a><a href=\"https:\/\/www.youtube.com\/@CoinEngineer\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>YouTube<\/strong><\/a>,\u00a0and\u00a0<a href=\"https:\/\/twitter.com\/coinengineers\" target=\"_blank\" rel=\"nofollow noopener\"><strong>Twitter<\/strong><\/a>\u00a0for the latest\u00a0<a title=\"News\" href=\"https:\/\/coinengineer.net\/blog\/news\/\" data-internallinksmanager029f6b8e52c=\"7\">news<\/a> and updates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recent US inflation data has sparked speculation that the Federal Reserve may be poised to cut interest rates as soon as its September meeting. A report released by the US Commerce Department on Friday indicated a slight slowdown in consumer spending last month. The easing price pressures and cooling labor market could bolster the Fed&#8217;s<\/p>\n","protected":false},"author":1,"featured_media":18161,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[7643,4119,7646,3752,7642,2345,2302,6550,7644,7645,7647,5366],"class_list":["post-25896","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy-news","tag-consumer-spending","tag-economic-growth","tag-fed-meeting","tag-federal-reserve","tag-fitch","tag-interest-rates","tag-monetary-policy","tag-pce","tag-recession","tag-recession-risk","tag-september-rate-cut","tag-us-inflation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US Inflation Data Signals Potential Fed Rate Cut - Coin Engineer<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/us-inflation-data-signals-potential-fed-rate-cut\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Inflation Data Signals Potential Fed Rate Cut - Coin Engineer\" \/>\n<meta property=\"og:description\" content=\"Recent US inflation data has sparked speculation that the Federal Reserve may be poised to cut interest rates as soon as its September meeting. 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