The Personal Consumption Expenditures (PCE) data released on Friday morning came in-line with analyst expectations. Invesco Chief Global Market Strategist Kristina Hooper, joins the Morning Brief to discuss the implications of this print for potential Federal Reserve rate cuts and broader market trends.
Hooper notes that the PCE data is signaling "that there is a disinflationary trend that is well in place." Although disinflation stalled in the first quarter, she points out that there has been a reacceleration in the second quarter, as evident in the GDP figure. She suggests that "the Fed is in a better position today to start cutting" rates. In her view, a Fed rate cut could materialize as early as July or September.
"We’re now at the point where the Fed has some very significant risks, that it is creating the longer it keeps rates at these very high levels because there are long and variable lags to monetary policy. I’d argue we haven’t seen all the damage to the economy yet because of those lagged effects," Hooper told Yahoo Finance. She adds, "so… it has to be thinking about where the puck [economy] is going, as opposed to where it is today."
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