Deutsche Bank analyzed that expectations for a Fed rate hike retreated as the U.S. Personal Consumption Expenditures (PCE) price index, announced on the 25th (local time), rose 0.4% month-over-month, falling short of economists' forecast of 0.5%. Deutsche Bank analysts stated in a report that this data "has the effect of curbing the Fed rate hike narrative that has gained traction in recent weeks." They added that while Fed officials maintain a cautious stance on the inflation outlook, the view that the Fed may not need to raise rates this year is gaining widespread acceptance. Consequently, the dollar weakened slightly as the market lowered its expectations for a Fed rate hike.
