Eco Week Ahead

Downshifting US Inflation Will Help Reassure the Fed

  • G-20 finance ministers and central bankers set to meet in Rio
  • Bank of Canada may cut rates; PMIs due around the world

Shoppers enter a wholesale club store in Alhambra, California.

Photographer: Eric Thayer/Bloomberg
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The runway toward a Federal Reserve interest-rate cut will come more into focus in the coming week amid fresh signs inflation is abating and economic activity is simmering down.

Economists expect the personal consumption expenditures price index minus food and energy — due on Friday — to have risen 0.1% in June for a second straight month. That would bring three-month annualized core inflation down to the slowest pace this year, and below the Fed’s 2% target.