Bank of America Survey: If PCE exceeds 3%, it may trigger the Federal Reserve to raise interest rates
In a foreign exchange and interest rate sentiment survey conducted by Bank of America in February, the majority of respondents (58%) believed that if the US PCE inflation annual rate exceeds 3%, it may prompt the Federal Reserve to raise interest rates. The PCE index is the preferred inflation indicator for the Federal Reserve. The survey also showed that 12% of respondents believe that if the 5-year/5-year inflation breakeven (based on market-based inflation expectations) is higher than 3%, it could potentially trigger an increase in interest rates.
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