Consumer spending is driving inflation: Economist

July's Personal Consumption Expenditures (PCE) data — the Federal Reserve's preferred inflation gauge — came in line with expectations on Friday. Core PCE, which excludes volatile food and energy costs, increased by 2.6% year-over-year, while the headline PCE index rose 2.5%.
Interactive Brokers senior economist José Torres joins Morning Brief to discuss what this data indicates about the overall economy.
Torres notes that despite cooling inflation, the economy is not amazing as consumers are "managing their budgets like light switches." He highlights alternating periods of strong spending and pullbacks focused on saving. Additionally, while inflation is cooling in sectors like commodities and automobiles, services continue to show inflationary pressure.
Regarding the PCE data's impact on future interest rate decisions, Torres believes the Fed will implement one rate cut, but it will affect pricing power across industries. He cautions that as rates lower, there are "risks that the economy starts to reheat."
"I think as the Fed walks down the monetary policy stairs, it's going to be a slow walk, similar to what we're seeing in the ECB [European Central Bank]," Torres tells Yahoo Finance.
#stockmarket #youtube #inflation

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[peterponcedeleon]

Consumers do not drive inflation. That is a government and media line. Inflation is created in one place and one place. Only, that is Washington DC. Inflation is simply adding more money to the current money supply, a natural consequence is higher prices. Remember, inflation is not higher prices. Higher prices are consequence of inflation.

[spacechalklate]

What, do you expect people to stop buying groceries?

Can society just stop living?

They will keep paying the price until they break.

Something’s going to give.

[stevemelton]

Inflation is too much money chasing too few goods. Where did all this excess money come from? Who’s been creating thousands of jobs each month?
A: Government

[Fgji]

Deficit Government spending is driving inflation.

[apidas]

I mean, that's capitalism at work, free market works

[spatty]

Back to school tax feee holidays were in July. So many families had to shop in July bc school started in August.

[PD_]

Rate cuts are inflationary. Fed should stand pat, let markets reach equilibrium. But a 25 bps cut will be throwing a bone to stock markets to end the year strong before the imminent deflationary recession numbers come out.

[PD_]

No, fools. Money supply expansion drives up the price levels which consumers are forced to pay. You need more devalued dollars for the same goods you got "cheaper" last year. Don't blame consumers for Fed's printing fiat currency to infinity.

[FrankGallagherr]

Who thinks Harris is 100X worse than Biden ? .

[TaniaGarciaduenas-ye]

For those who call me crazy or stupid Socrates founded Christian democracy the economy in Greece everything proceeds from Turkey a little respect there was a war between Persia and Alexander the Great free the People 🤑