FOMC Holds Rates as Inflation Remains Above Target

The upcoming FOMC meeting is expected to be a hold on interest rates, according to economists. With inflation coming in cooler than expected and employment also showing signs of slowing down, the Committee is likely to keep policy unchanged. However, with recent Fed communications indicating that the bar for rate hikes is low, some hawkish dissents are probable.

The PCE report on Thursday will provide crucial data on core inflation, which is expected to show a 0.2% monthly gain and a year-over-year reading of 3.3%. This would be slightly cooler than the previous month's print, but still above the Fed's target. The report also includes personal income and spending figures, with real disposable income growth under pressure and the saving rate at multi-year lows.

In other regions, Australia is expected to see a 4.1% year-over-year increase in headline inflation, while quarterly trimmed mean inflation comes in at 0.9% quarter-over-quarter. The Bank of England is also expected to hold rates unchanged, despite some hawkish dissenters. Meanwhile, the Eurozone is expected to show firmer GDP growth and inflation.