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2026-05-28 20:39:10
[Lower-than-expected PCE eases rate hike fears; S&P 500 futures dip slightly after six-day winning streak] ⑴ The core PCE price index, released on Thursday, rose 0.2% month-over-month in April, lower than the market expectation of 0.3%. The Fed's focus on the 12-month core inflation rate rose to 3.3% year-over-year, in line with expectations, the highest level since November 2023, higher than March's 3.2%. ⑵ The market had already priced in the inflationary effects of the Iran war and the continued closure of the Strait of Hormuz, shifting expectations from rate cuts to a rate hike before the end of the year. Latest data shows that the market's priced-in probabilities of a rate hike are: 11% before the July 29 meeting, 29% before the September 16 meeting, 38% before the October 28 meeting, and 55% before the December 9 meeting. ⑶ The S&P 500 recorded its sixth consecutive day of gains on Wednesday, with a year-to-date increase of 9.9%. S&P 500 futures fell slightly by 0.2% in early trading on Thursday, while the 10-year Treasury yield rose 3 basis points to 4.51%. (4) Overall PCE inflation (including food and energy) is expected to rise to 3.8% from 3.5%, a 0.5% increase month-over-month. Initial jobless claims, April durable goods orders, and the revised Q1 GDP figures will also be released on Thursday.
