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Last week ended on a positive note with a welcomed Friday rally following an in-line reading of the core personal consumption expenditures (PCE) price index.1 Equity and credit remain very sensitive to the direction of inflation readings, given the Federal Reserve’s messaging that it will need to see many months of “good inflation data” before considering rate cuts.2 Treasury rates fell with the inflation report, stemming their persistent rise over the previous two weeks.3 U.S. consumer confidence improved in May,4 while first-quarter gross domestic product (GDP) came in as expected at 1.3%.5
The week ahead will be eventful with a number of important economic releases, including the Institute for Supply Management (ISM) Manufacturing and Services Index, durable goods orders and the non-farm payroll report on Friday.6 Similar dynamics will be in play, with risk markets hoping for the Goldilocks scenario of slower yet positive growth.
Sources:
1CNBC – The Fed’s preferred inflation measure rose 0.2% in April, as expected; 5/31/24
2Associated Press – Federal Reserve minutes: Policymakers saw a longer path to rate cuts; 5/22/24
3U.S. Department of the Treasury – Daily Treasury Par Yield Curve Rates; as of 5/31/24
4The Conference Board – U.S. Consumer Confidence; 5/28/24
5Bureau of Economic Analysis – Gross Domestic Product, First Quarter 2024 (Second Estimate) and Corporate Profits (Preliminary); 5/30/24
6MarketWatch – U.S. Economic Calendar; as of 6/3/24
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