USVM - Fed Awaits Better Inflation Data Treasury Yields Continue To Decline

2024-06-18 08:45:00 ET

Summary

• The Fed did not lower its inflation forecast based on the Personal Consumption Expenditure (PCE) index, and it raised its unemployment forecast to 4.1%.
• The Fed cannot fight market rates, so if Treasury yields go lower, the Fed may be forced to cut rates sooner.
• Over the next two weeks, Russell will refine its proposed changes to their indices. Small- and mid-cap stocks added to the Russell indices on June 24 are typically the biggest winners.

The Fed’s Federal Open Market Committee (FOMC) statement on Wednesday acknowledged “modest further progress” on inflation. That was the good news. The bad news is that the Fed did not lower its inflation forecast based on the Personal Consumption Expenditure (PCE) index and it raised its unemployment forecast to 4.1%. In his best Fed-speak, Fed Chairman Jerome Powell said, “We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%.”...

For further details see: