Today, Fed Chair Powell’s speech at the Jackson Hole conference will finally be held. The market is expected to show a positive interest rate hike stance. While pointing out the risk that interest rate hikes will lead to a future economic slowdown, it appears that the Fed is currently expected to take decisive measures to curb inflation. There have been some corrections in the trend of the dollar’s strength so far this week, but no major collapse has been seen. The lecture will start at 11:00 pm Japan time.
However, before the next FOMC meeting in September, the release of important price and employment indicators is on the horizon. One of them, the PCE deflator (July), will be announced today. According to most market forecasts, the PCE deflator is expected to slow down from +6.8% in the previous year to +6.4% year-on-year. The same is true for the core deflator. The month-on-month growth is expected to slow down considerably from +0.6% in the previous month to +0.2%. It is important to note that the market reacts to even 0.1 percentage point deviation from the market forecast as it is an important indicator that is referred to by the US FOMC. The announcement is scheduled.
After the PCE deflator, pay attention to the movements after Powell’s speech at the Jackson Hole conference.