Dollar Drops As Fed’s Favorite Inflation Indicator Disappoints

Americans spending outpaced their income for the 5th month in a row (after massive revisions), and thanks to those revisions, spending is up even greater than we were told previously…

After revisions, spending growth is its highest since Oct 2014…

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

Both spending and income growth MoM printed as expected +0.4% MoM, but May spending was revised from +0.2% MoM to +0.5% MoM…

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

Real personal spending missed expectations, rising just 0.3% MoM vs expectation sof a 0.4% rise (but May was revised notably higher).

Income growth was relatively stable (after revisions)…

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

Leaving the savings rate hovering at a ‘healthy’ 6.8%…

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

Thanks to the magic of upward revisions…

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

But, most interesting is the miss on Core PCE growth, rising 1.9% YoY (below expectations of a 2.0% YoY gain), the same growth as in May…

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

While we highly doubt this will do anything to shift Powell from his path of “1 hike/quarter until the world implodes”, it has sparked some dollar weakness.

Dollar Drops As Fed's Favorite Inflation Indicator Disappoints
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