US: Focus on inflation performance and personal income and spending - TDS

Research Team at TDS, suggests that as the market looks beyond the relatively hawkish tone of Fed Chair Yellen’s Jackson Hole remarks, the focus will be on the flow of economic reports as investors try to benchmark the prospects for a September hike.

Key Quotes

“The July personal income and spending report will provide some important context for gauging the tone of US economic activity, and TD’s below-consensus expectation is for personal spending activity to eke out a modest 0.2% m/m pace in July, representing a step-down from the brisk pace last quarter.

The inflation performance should also be subdued, with the core PCE deflator rising at a very meager 0.1% m/m pace, though the annual pace of core inflation should remain unchanged at 1.6% y/y, underscoring the weak inflationary backdrop.”