Bank of America: U.S. PCE inflation is expected to satisfy the Federal Reserve

The July 13th Golden Data, the U.S. bank economists said in a report that the core PCE inflation rate for June, which will be released later this month, may be slightly below 0.2%. They said: “On an annual basis, this will indeed meet the Fed’s 2% target.” A series of weak inflation reports have increased expectations of a rate cut in September. The unexpected increase in June PPI was mainly due to service sector inflation, and the details used to calculate PCE inflation were generally soft, according to the U.S. bank. The U.S. bank also said that base effects will keep the annual growth rate at 2.6%.