ピックニュース

Wall Street eyes PCE data, Fed officials' remarks [Weekly outlook for New York stock market]

Son Min

概要

This week, the New York stock market is expected to focus on the August PCE data and remarks by Fed officials.
Depending on the August PCE results, the pace of rate cuts could change.
Concerns over a federal government shutdown could act as an additional source of market instability.

The pace of rate cuts could hinge on the August PCE data

Concerns over a federal government shutdown also a market risk

This week, the New York stock market is expected to focus on key inflation indicators and public remarks by U.S. central bank (Fed) officials.

The Fed cut its policy rate by 0.25 percentage points at the regular Federal Open Market Committee (FOMC) meeting on the 17th–18th and signaled two additional rate cuts this year. The cut was a 'risk management' measure related to the fact that, while the economy is not in a recession, employment is cooling rapidly.

However, the pace of rate cuts could change depending on the August personal consumption expenditures (PCE) price index to be released on the 26th. Chair Jerome Powell said at the post-FOMC press conference that tariff-driven inflation would be temporary, but if the PCE inflation rate comes in higher than expected, that outlook could be challenged. According to a FactSet survey, the August PCE price index is expected to rise 0.3% month-on-month, higher than the previous month's 0.2% increase. The core PCE price index, excluding volatile food and energy, is projected to rise 0.3% month-on-month. The prior month's reading also rose 0.3%.

Alongside the inflation data, public remarks by key Fed officials are also expected to draw market attention. With the FOMC meeting concluded, senior Fed officials will outline their respective views on the future path of rates. Initially, there were fewer dissenting votes against rate cuts at last week's meeting than the market had expected.

Meanwhile, Wall Street is also concerned about the possibility of a federal government shutdown. On the 19th, the U.S. Congress failed to pass a continuing resolution (CR) to avert a temporary government shutdown because the CR passed by the House was rejected in the Senate. Congress went into a week-long recess that afternoon; if that schedule holds, there will be little time left after returning to prevent a shutdown.

New York—Shin-Young Park, correspondent nyusos@hankyung.com