What is the Federal Reserve's preferred inflation measure?

The Federal Reserve's preferred measure of inflation is the personal consumption expenditures price index.

Why are investors watching the US PCE price index closely?

Investors are watching the US PCE price index for clarity on the Federal Reserve's future interest rate decisions.

What is happening with Japanese government bond yields?

Japanese government bond yields have surged to an 18-year high, driven by inflation and rate hike expectations.

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Fed's Inflation Gauge: Market Seeks Clues on Rate Path

6 Dec

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Summary

US inflation data due Friday may clarify Federal Reserve's interest rate decisions.
US stock futures and European markets showed modest gains.
Japanese government bond yields reached an 18-year high.

Fed's Inflation Gauge: Market Seeks Clues on Rate Path

Market participants are closely monitoring the upcoming release of the U.S. personal consumption expenditures price index, the Federal Reserve's primary inflation indicator. This crucial data, delayed from September, is anticipated to offer much-needed clarity on the Fed's potential interest rate adjustments, especially given recent conflicting economic signals and ongoing assessments of the labor market's strength. The Fed is widely expected to implement a 25 basis point rate cut next week.

Ahead of this key report, U.S. stock futures indicated a positive opening, following a mixed performance in the previous session. International stock markets also saw a general upward trend, with Europe's Stoxx 600 and the UK's FTSE 100 both climbing. However, U.S. Treasury yields experienced a slight decrease, reversing some of the previous day's gains, even as Japanese yields continued their ascent to multiyear highs.