There are two main types of PCE data:
2. Core PCE: This excludes the more volatile food and energy prices to provide a clearer view of underlying inflation trends. Core PCE is the preferred inflation gauge for the Federal Reserve because it gives a more stable picture of long-term inflation pressures.
You can see the median estimates for the various PCE data points below in the table.
Core PCE Price Index m/m
0.1% to +0.3%of the 54 forecasters (Reuters poll) 6 are at +0.2%, 35 are at +0.3%, and 13 are at 0.4%2.4% to 2.8%of the 39 respondents for the y/y projection1 is at 2.4%2 are at 2.5%3 are at 2.6%18 are at 2.7%15 are at 2.8%
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Data results that fall outside of market low and high expectations tend to move markets more significantly for several reasons:
Psychological Impact: Investors and traders are influenced by psychological factors. Extreme data points can evoke strong emotional reactions, leading to overreactions in the market. This can amplify market movements, especially in the short term.
Triggering of Automated Trading: In today’s markets, a significant portion of trading is done by algorithms. These automated systems often have pre-set conditions or thresholds that, when triggered by unexpected data, can lead to large-scale buying or selling.
Liquidity and Market Depth: In some cases, extreme data points can affect market liquidity. If the data is unexpected enough, it might lead to a temporary imbalance in buyers and sellers, causing larger market moves until a new equilibrium is found.
Chain Reactions and Correlations: Financial markets are interconnected. A significant move in one market or asset class due to unexpected data can lead to correlated moves in other markets, amplifying the overall market impact.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( US inflation (PCE) data due Friday - critical ranges to watch - clustered around +0.3% m/m )
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