WS #15153
August PCE inflation data came in cooler than expected, boosting odds of a Fed rate cut in the near term and keeping rate hike expectations at bay for October. However, this dovish signal is being overshadowed by geopolitical inflation risks, particularly from rising crude prices and potential RBI rate hikes in India. The ECB's Lagarde hinted at an early departure, adding uncertainty to European policy. Meanwhile, OPEC+ is expected to maintain production quotas, but physical supply disruptions are driving prices higher regardless of cartel policy.
Macro Policy and Inflation
August PCE inflation data came in cooler than expected, boosting odds of a Fed rate cut in the near term and keeping rate hike expectations at bay for October. However, this dovish signal is being overshadowed by geopolitical inflation risks, particularly from rising crude prices and potential RBI rate hikes in India. The ECB's Lagarde hinted at an early departure, adding uncertainty to European policy. Meanwhile, OPEC+ is expected to maintain production quotas, but physical supply disruptions are driving prices higher regardless of cartel policy.