Read the highlights of this week’s commentary from Helios:
- Initial estimates of second-quarter GDP came in stronger than expected, showing the US economy grew at an annual rate of 2.8% after rising 1.4% in the first quarter. The core personal consumption expenditures (PCE) price index, a key measure of underlying inflation that excludes food and energy, rose 2.9%, easing from the first quarter but still higher than estimated.
- The Federal Reserve’s preferred inflation metric, the core PCE price index, increased by 0.2% in June and 2.6% from a year ago. Inflation-adjusted consumer spending also grew by 0.2% in June, with spending for May revised upwards.
- Personal savings as a percentage of disposable income dropped to 3.4% in June, the lowest since December 2022. Additionally, inflation-adjusted disposable income growth slowed to 0.1%, suggesting a potential decline in future consumer spending capabilities.
- According to a Bloomberg News survey, Economists predict the Fed will signal its plans for a quarter-point interest rate cut in September at their July 30-31 meeting. This is expected to initiate quarterly reductions through 2025.
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