Inflation will tell whether strong US GDP is bad news for risk appetite
Markets are still digesting yesterday’s blockbuster US GDP report — growth came in at 3.8%, the fastest pace in nearly two years, and far above expectations. Strong data may look like good news, but for investors it complicates the Federal Reserve’s (Fed) path: if the economy is still running hot, do we really need rate cuts this year? Yields climbed, the dollar strengthened and equities slipped from record highs as traders reassessed.
Today, all eyes are on the Fed’s favourite inflation gauge, the core PCE. A softer print could revive risk appetite and give gold some breathing space, while a...