Employment and inflation are still the two major problems plaguing the Federal Reserve.
At 20:30 Beijing time, the US core PCE price index recorded an annual rate of 3.6% in August, in line with expectations. The US core PCE price index recorded a monthly rate of 0.3% in August, slightly higher than the forecast of 0.3%. The monthly rate of personal expenditure in the US recorded 0.8% in August, slightly higher than the forecast of 0.6%.
After the data was released, spot gold rose more than 5 US dollars in the short term. As of 21:05, COMEX futures had an intraday increase of 2.00%, and is now reported at 22.47 US dollars/ounce.
Lingfeng Global analysts believe that the data is in line with expectations, indicating that the current core inflation market, which is at an all-time high in the short term, has been digested. There are no obvious mood swings characteristic of the market. The overall impact is limited, and prices remain fluctuating in the range of 1745.0 to 1760.0.
Looking at the long term, without sufficient support from good economic data, the Federal Reserve's monetary policy will need more data guidance, and the policy will not be particularly clear in the future.The long and short pattern will remain stable, and the probability that the price of gold will fluctuate in the range will increase. However, with the gradual normalization of monetary policy in the future, there is a possibility that prices will continue to fall after the adjustment.
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FXStreet analyst YoHay Elam believes that only a sharp drop in the inflation index favored by the Federal Reserve could shake the dominance of the US dollar.
The Bureau of Economic Analysis of the US Department of Commerce said that the increase in the PCE price index in August reflected an increase in the prices of goods and services. Energy prices rose 24.9% and food prices rose 2.8%. The PCE price index excluding food and energy rose 3.6% in August compared to the same period last year. In August, personal consumption expenditure calculated at current prices increased by 13.5 billion yuan, reflecting an increase of 66 billion yuan in goods expenditure and an increase of 64.6 billion yuan in service expenses.
On the goods side, spending on food, beverages and “other” non-durable goods increased, while spending on automobiles and spare parts decreased.
In the service sector, growth has been widespread, mainly in personal care, clothing services, housing and utilities, and health care.
The financial website Forexlive commented on the US price index, saying that these figures were largely in line with the expected consensus, but revenue was surprisingly weak.The good news for the Federal Reserve is that there was no unexpected sharp rise in inflation.
Earlier, Federal Reserve Chairman Powell acknowledged,The “tension” between inflation and employment is the Fed's biggest challenge.Supply bottlenecks have had a longer impact on inflation than expected, but the US is still far from full employment. This gave the Fed an incentive to keep interest rates low.
The number of jobless claims in the US announced on Thursday up to the beginning of the week of September 25 further validated Powell's concerns. The figure has been rising for three consecutive weeks, which may reflect worsening labor market conditions and the high volatility of this weekly data.
Federal Reserve Governor Brainard said in his Monday speech that the US employment rate is still below the Federal Reserve's standard for reducing debt purchases. As the epidemic rebounds, the employment situation in the fall may be very serious.
On Friday, due to concerns about the employment situation, FOMC's 2023 vote committee KashkariIt is expected that the Federal Reserve will not raise interest rates until 2024.He added that there is still a long way to go before the job market recovers.
On the inflation side, Powell is still trying to reassure that market inflation is temporary. He claims that he hasn't seen the presentQualcommevidence that inflation affects expectations,High inflation is expected to ease somewhat in the first half of next yearIt also promised that if inflation remains high for too long, the Federal Reserve will respond.
Chicago Federal Reserve Chairman Evans is more optimistic. In his opinion,It may take another two years before inflation is strong enough to require interest rate hikes.Regarding the current inflation situation, Evans pointed out that he is more concerned that the US will not be able to generate enough inflation in 2023 and 2024, rather than that inflation may rise too high.