US Fed's favoured inflation "unlikely to serve as a lifeline"

In the varied fabric of economic indicators, PCE inflation data is the golden thread that weaves through the Fed's ever-evolving decision-making process. As the Fed's favoured inflation gauge, these figures are pivotal in shaping upcoming policy decisions and are a barometer for their monetary outlook. With headline PCE inflation rising 0.2%, the Fed will likely proceed with an expected 25 basis points cut, reflecting a cautious approach amidst broader economic uncertainty. However, with the dollar languishing near yearly lows, this inflation print is unlikely to serve as a lifeline, with the trajectory of rate cuts remaining intact. Yet, with Gold prices hovering near record highs, this PCE reading might allow the precious metal to shine even brighter as a firmly dovish Fed continues to look more likely.

Now that inflation is under control—ironically, the same inflation once deemed "transitory"—the rate cut is even more likely. Powell is already leaning in that direction, and he's dropped several hints. If you look at interest rate futures, a 0.25% cut is practically a lock. Powell claims the economy is doing well, but that’s far from the truth. Just look at rising auto loan defaults, increasing credit card delinquencies, troubling housing statistics, declining sales, and growing corporate bankruptcies. If you dig deeper, it's clear the economy is heading downhill quickly. Meanwhile, the BRICS nations are discussing a new currency, called "The Unit," which is supposedly backed by 40% gold. With BRICS representing 60% of the global economy, if they start using a currency backed by 40% gold, what do you think is going to happen to the US dollar - it is going to crush it.