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VRA Letter: PCE Data Signals Continued Disinflation. Contrarian Alert: The Most Hated Bull Market of My Career? VRA Portfolio Notes & Base Case.

Good Friday morning. Minutes ago we learned that the Personal Consumption Expenditure Index (PCE)…the Fed’s preferred inflation gauge...came in at 2.7% y/y for the month of April, exactly matching estimates, as did the Core PC ...

Posted On May 31, 20245 MIN Read
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Good Friday morning. Minutes ago we learned that the Personal Consumption Expenditure Index (PCE)…the Fed’s preferred inflation gauge...came in at 2.7% y/y for the month of April, exactly matching estimates, as did the Core PCE data, which matched estimates of 2.8% y/y.

In addition…and this is a trend seen consistently over the last year +….prior months were revised “lower" on both personal income and spending. This report is “disinflationary”, a trend that has become well established over the last year. On the news, stocks are higher and bond yields are lower, with gold, silver and the miners trading solidly higher (1% +).

VRA Bottom Line

In advance of the next Fed meeting (June 11, 12), this is another friendly inflationary report. We continue to look for 2-3 rate cuts this year with September as the favorite of betting odds for the first cut. In addition…and we don't believe this is being talked about enough…from the birth of Q3 in the US (2008), the ECB, BOE and Fed have m...

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