All Eyes on Inflation — Tom Essaye Says PCE Report Could Make or Break Rate Cut Hopes
Markets need a tame report to keep the soft landing story alive: Tom Essaye Quoted in Morningstar
EMEA Morning Briefing: Investors Await Fed’s Preferred Inflation Gauge
Investors are closely watching the PCE inflation report, set for release today, as it remains the Federal Reserve’s preferred inflation metric.
According to Tom Essaye, founder of Sevens Report Research, the market is hoping for a quiet reading to preserve the case for two rate cuts later this year.
“Markets are counting on inflation to stay subdued to keep expectations for two rate cuts in 2025 intact.”
— Tom Essaye, Sevens Report
While recent CPI and PPI data have come in light, any surprise to the upside in today’s PCE could push Treasury yields higher and pressure equity markets, Essaye warned.
“If inflation surprises to the upside… that will push yields higher and pressure stocks.”
With stocks near all-time highs and rate cut optimism priced in, a hotter-than-expected inflation print could shift sentiment quickly.
Also, click here to view the full Dow Jones article published in Morningstar on June 27th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.
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