Fed cuts interest rates

Recent U.S. price data shows minimal inflation concerns, with the PCE price index rising only 0.1% in June, suggesting potential easing of the Federal Reserve's monetary policy. The annual increase of 2.5% aligns with forecasts, providing the Fed with confidence as it aims for a 2% inflation target. In parallel, the Bank of Japan is expected to announce a quantitative tightening plan aimed at reducing its bond purchases from 6 trillion yen to 3 trillion yen monthly, a step towards normalizing its economic policy. Meanwhile, rental market inflation appears to be easing, with CPI shelter inflation decreasing from 8.3% to 5.2%, indicating potential financial relief for renters. Increased housing supply is expected to keep rent hikes minimal, as landlords face a competitive rental market. Additionally, U.S. GDP grew at an annualized rate of 2.8% in Q2 2024, primarily driven by consumer spending and investment, amidst a backdrop of fluctuating bond yields and jobless claims.