Post by account_disabled on Mar 12, 2024 3:48:57 GMT
Eurozone inflation is likely to continue falling when June data is released on Friday, but rate setters at the European Central Bank will be watching to see if price growth continues to rise after the energy and food prices. Consumer prices in the single currency bloc are expected to rise 5.7 percent in the year to June, compared with 6.1 percent the previous month, according to a Reuters poll of economists. However, the ECB is intensely focused on underlying price pressures, which could remain stagnant even if energy prices fall from last year's surge. Service prices are likely to be boosted by comparison with last year, when Germany launched heavily subsidized public transport tickets. Andrew Kenningham, an economist at research group Capital Economics, said he expected the gap in transport prices in Germany to push euro zone core inflation, excluding energy and food prices, to 5.5% in June.
Compared to in May. There were signs of cooling price pressures in S&P Global's purchasing managers survey last week, which showed companies' selling prices rising at the slowest pace in 27 months. But higher Russia Mobile Number List wages continued to raise their input costs. “The bottom line is that, looking through the volatility, it is not yet clear that services inflation is falling; in fact, it could surprise to the upside next week,” Kenningham said. “So the ECB will remain firm in its rhetoric.” Martin Arnold Will the Fed's preferred inflation measure show a cooling in prices? Investors will also keep an eye on the core personal consumption expenditures index, the Federal Reserve's preferred measure of inflation, for the latest signs of U.S. inflation pressures.
The data is expected to show that the price gauge, which excludes the volatile food and energy sectors, rose 4.7 percent year-on-year in May, the same level as in April, according to economists polled by Reuters. The core PCE has been stuck between and percent since the beginning of the year and has been a cause of major concern for the Fed. The stubbornly high core PCE figure is part of the reason the Fed has suggested it will have to raise interest rates twice more this year, even after pausing its rate-hiking cycle in June. In its summary of economic projections this month, the so-called dot plot, the Fed projected that the core PCE would end the year at 3.9%, significantly higher than its forecast of 3.6% in March. Some analysts believe the Fed is being too pessimistic. Deutsche Bank's Gabriele Cozzi and Matt Raskin this week published research suggesting core PCE could end the year around 3.5% as the economy slows.
Compared to in May. There were signs of cooling price pressures in S&P Global's purchasing managers survey last week, which showed companies' selling prices rising at the slowest pace in 27 months. But higher Russia Mobile Number List wages continued to raise their input costs. “The bottom line is that, looking through the volatility, it is not yet clear that services inflation is falling; in fact, it could surprise to the upside next week,” Kenningham said. “So the ECB will remain firm in its rhetoric.” Martin Arnold Will the Fed's preferred inflation measure show a cooling in prices? Investors will also keep an eye on the core personal consumption expenditures index, the Federal Reserve's preferred measure of inflation, for the latest signs of U.S. inflation pressures.
The data is expected to show that the price gauge, which excludes the volatile food and energy sectors, rose 4.7 percent year-on-year in May, the same level as in April, according to economists polled by Reuters. The core PCE has been stuck between and percent since the beginning of the year and has been a cause of major concern for the Fed. The stubbornly high core PCE figure is part of the reason the Fed has suggested it will have to raise interest rates twice more this year, even after pausing its rate-hiking cycle in June. In its summary of economic projections this month, the so-called dot plot, the Fed projected that the core PCE would end the year at 3.9%, significantly higher than its forecast of 3.6% in March. Some analysts believe the Fed is being too pessimistic. Deutsche Bank's Gabriele Cozzi and Matt Raskin this week published research suggesting core PCE could end the year around 3.5% as the economy slows.