Core PCE Price Index Expected to Rise, Impacting Inflation Outlook

Core PCE Price Index Expected to Rise, Impacting Inflation Outlook

The Bureau of Economic Analysis will likely report the advanced Core PCE Price Index for today at 12:30 GMT, with estimates likely to be up from August's 0.1% at 0.2% for this month. This price index excludes volatile prices of food and energy, providing proof of inflation in the rise and fall of the prices of both durable and non-durable goods as well as services, thus constituting one of the most fundamental pieces of evidence the Federal Reserve requires as it endeavors to assess prevailing inflationary conditions.

In the case of a revised increase in the Core PCE Price Index, as is forecasted by analysts, that would drive the FOMC's monetary policies upward and result in reviewing the interest rate situation. An upward movement in indices might cause the currency to raise its pressure in light of an increase in its growth due to inflation responses by investors. A failure or unexpected result would create volatility in the marketplace, affecting an investor's psychology and further affecting their investment currency. Therefore, stakeholders will be very keen because this release will be at a point in determining the economic forecasts and market dynamics through the Core PCE Price Index.

Canada’s GDP Growth Likely to Slow in September 

The country's GDP for September is expected to come out today at 12:30 GMT, which is likely to grow only by 0.1%, as per Statistics Canada. This is a slowdown from August when the growth rate stood at 0.2%. In other words, GDP is the gross value of all goods and services produced within the Canadian economy, so a higher GDP indicates better economic health of the country.

A sign this economic growth is losing steam may indicate if the scheduled slowdown actually comes to fruition. Then, for a less-than-anticipated GDP growth event, views of the CAD could cause more concern. There then could be some downward pressure as a consequence. Contrarily, market expectations for the CAD should rally, if the GDP exceeds estimates. The data, depending on how the broader economic conditions are going to be, can influence future economic strategies and monetary policies for investors and policymakers.