Ben and Dominique evaluate the policy implications of the latest PCE inflation print and Fed Chair Warsh’s surprisingly hawkish speech at Jackson Hole. They analyse the divergence between PCE and CPI disinflation, highlighting how portfolio management fee computations and index-weighting differences make for slower PCE than CPI disinflation. While Warsh’s assessment of the economy and financial conditions hint at a potential rate hike, they identify Fed Governor Waller’s upcoming speech as the critical catalyst that could seal a September decision.
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