Key Events This Holiday-Shortened Week: PCE, Durables, Consumer Confidence And Fed Speakers

SSDD: with stocks set to hit new record highs, the hope this morning once again is that the days may be numbered for the war in Iran, with momentum building since the start of the weekend that a deal could be in the works. Brent, which ended last week at $103.54/bbl, is this morning trading at $97.87/bbl, around -5.48% lower than Friday’s close. However, Brent had got as low as $96.02 late yesterday before news overnight that US and Israeli jets conducted fresh strikes in Southern Iran, hitting missile launch sites and mine-laying boats. These actions were described as “defensive” and not an end to the ceasefire with Iran.

Net net, optimism is still elevated that an agreement can be made to end the war. We have been here before, of course, but it has felt for some time that the move towards peace has been three steps forward and one or two back. It is now 48 days since the main kinetic encounters, and according to DB’s Jim Reid, such a prolonged truce and ceasefire would not have held if the US genuinely wanted to continue strikes, unless there was absolutely no alternative. Last night’s targeted action is clearly a warning shot that the ceasefire is fragile though, so we will have to see what the next few days of negotiations bring.

Moving on to the rest of this week, inflation once again dominates with important price data across the US, Europe and Japan. In the US, the clear focal point is Thursday’s April personal income and spending report (Thursday), which contains the Fed’s preferred inflation gauge. DB economists expect core PCE inflation at around +0.3% month-on-month, unchanged from March, with the year-on-year rate edging higher. This release matters not just for the inflation print itself, but for how it fits with the broader narrative of sticky services inflation and resilient demand.

On the real economy side of the same report (Thursday), economists expect momentum to cool after a very strong March, with personal consumption growth slowing back to around +0.3% month-on-month and personal income rising by roughly +0.4%. This comes after a hawkish speech from Waller on Friday. He discussed how the recent labor market and inflation data had caused him to reevaluate the balance of risks with inflation becoming the “driving force” behind monetary policy in the near term. In particular, he noted that he would support changing language in the statement to remove the easing bias and make it clear that “a rate cut is no more likely in the future than a rate increase”. In light of this there is a lot of Fedspeak to watch this week. You can see a list in the day-by-day calendar at the end as usual but keep an eye on Minneapolis’s Kashkari (today) and Dallas’s Logan (tomorrow), both of whom had dissented against the easing bias in the April statement. They are likely to repeat their view that the stance of monetary policy should be more balanced, particularly as inflation risks remain front of mind.

Staying with the Fed, last Friday, DB’s Chief US economist, Matt Luzzetti, wrote an interesting piece entitled “overinsured” where he discusses how the Fed has delivered 175bps of rate cuts in this cycle even as inflation has remained well above target, framing the last round as “insurance” or “risk management” cuts in response to elevated downside labor market risks. Matt suggests that relative to a set of standard policy rules, the first set of cuts in 2024 was appropriate. But following the second set last year, and the recent acceleration of inflation, the fed funds rate is now significantly below all policy rule settings. This finding is robust to different plausible estimates of r-star and the use of economic forecasts instead of current inflation and unemployment in the policy rules. 

Beyond PCE, Thursday also brings durable goods orders (Thursday), where our economists look for a modest headline increase consistent with steady but unspectacular capital spending momentum. Earlier in the week, the Conference Board’s consumer confidence index (tomorrow) is expected to edge lower, potentially reflecting the cumulative impact of higher rates and policy uncertainty. Weekly initial jobless claims (Thursday) remain an important high-frequency signal on labor market conditions, although holiday effects may add some volatility.

In Europe, attention turns to the May flash inflation prints at the end of the week, with Germany, France, Italy and Spain all reporting on Friday, ahead of the Eurozone aggregate the following week. DB economists expect inflation to remain above target across the region. Alongside the data, the ECB publishes the account of its April meeting (Thursday) and its Financial Stability Review (Wednesday), offering further insight into how policymakers are balancing lingering inflation pressures against softer growth and financial stability considerations.

In Asia, Japan is the key focus. Friday’s Tokyo CPI (Friday) will provide an early read on national inflation trends, alongside April industrial production and retail sales (Friday). Our economists expect inflation measures to firm modestly, underscoring that price pressures remain present even as activity data stay mixed. Elsewhere, China releases industrial profits (tomorrow), Australia publishes its April CPI (Wednesday), and the RBNZ announces its latest policy decision (tomorrow), where most economists expect the cash rate to be left unchanged.

On the corporate side, earnings highlights include US tech names such as Dell, Marvell and Salesforce, alongside consumer-facing firms including Costco and Dollar Tree, with most results clustered around mid-to-late week.

Courtesy of DB, here is a day-by-day calendar of events

Tuesday May 26

• Data: US May Conference Board consumer confidence index, May Dallas Fed manufacturing activity, Philadelphia Fed non-manufacturing activity, April Chicago Fed national activity index, March FHFA house price index, Q1 house price purchase index, France April retail sales
• Central banks: ECB’s Sleijpen speaks
• Earnings: AutoZone, Zscaler
• Auctions: US 2-yr Notes ($69bn)

Wednesday May 27

• Data: US May Richmond Fed manufacturing index, business conditions, Dallas Fed services activity, China April industrial profits, Japan April PPI services, France May consumer confidence, Italy March industrial sales, EU27 April new car registrations, Australia April CPI
• Central banks: Fed’s Kashkari, Logan and Cook speak, ECB Financial Stability Review, RBNZ decision
• Earnings: Marvell, Salesforce, Synopsys, Snowflake
• Auctions: US 2-yr FRN (reopening, $28bn), 5-yr Notes ($70bn)

Thursday May 28

• Data: US April PCE, personal income, spending, durable goods orders, new home sales, initial jobless claims, France April PPI, Italy May consumer confidence index, economic sentiment, manufacturing confidence, April PPI, Eurozone May economic confidence, Canada Q1 current account balance, Norway Q1 GDP
• Central banks: Fed’s Jefferson, Goolsbee, Musalem and Williams speak, ECB’s account of the April decision, ECB’s Lane, Cipollone and Schnabel speak, BoE’s Lombardelli and Breeden speak, BoC Financial Stability Report
• Earnings: Costco, Dell, Autodesk, SSE, MongoDB, Dollar Tree
• Auctions: US 7-yr Notes ($44bn)

Friday May 29

• Data: US April advance goods trade balance, retail inventories, wholesale inventories, May MNI Chicago PMI, UK May Lloyds Business Barometer, Japan May Tokyo CPI, consumer confidence index, April jobless rate, job-to-applicant ratio, retail sales, industrial production, housing starts, Germany May CPI, unemployment claims rate, France May CPI, April consumer spending, Q1 total payrolls, Italy May CPI, April unemployment rate, Canada Q1 GDP, Sweden Q1 GDP
• Central banks: Fed’s Daly, Bowman and Paulson speak, ECB’s Panetta, Radev and Muller speak, BoE’s Bailey speaks

Finally, looking at just the US, the economic data releases this week are the durable goods report and the PCE inflation report on Thursday. There are several speaking engagements with Fed officials this week, including events with Vice Chair Jefferson and Vice Chair for Supervision Bowman; Governors Cook and Waller; and Presidents Goolsbee, Logan, Williams, Musalem, Barkin, Schmid, Paulson, and Daly

Tuesday, May 26 

• 09:00 AM FHFA house price index, March (consensus +0.1%, last flat)
• 09:00 AM Case-Shiller home price index, March (GS -0.3%, consensus -0.1%, last -0.1%) 
• 10:00 AM Conference Board consumer confidence, May (GS 91.5, consensus 92.0, last 92.8)
• 10:00 AM Dallas Fed manufacturing index, May (consensus flat, last -2.3)

Wednesday, May 27 

• 04:00 AM Dallas Fed President Logan (FOMC voter) speaks: Dallas Fed President Lorie Logan will take part in a panel on monetary policy at an event hosted by the Bank of Japan. Text is expected. In a statement explaining her dissent from the implicit easing bias in the April FOMC’s post-meeting statement, Logan said she was “increasingly concerned about how long it will take inflation to return all the way to the FOMC’s 2 percent target.” Logan stressed that “PCE inflation has exceeded 2 percent for more than five years” and that “even before recent increases in the prices of energy and other commodities, [measures of inflation that strip out extreme price changes or categories where prices are more volatile] had been running meaningfully above 2 percent.” In addition, she noted that “the conflict in the Middle East raises the prospect of prolonged or repeated supply disruptions that could create further inflationary pressures.”
• 10:00 AM Richmond Fed manufacturing index, May (consensus +4, last +3)
• 03:55 PM Fed Governor Cook speaks: Fed Governor Lisa Cook will deliver a speech on AI, the economy, and the financial system at the Stanford Institute for Economic Policy Research (SIEPR)’s Policy Forum. Text and moderated Q&A are expected.
• 08:00 PM Fed Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on monetary policy and supply shocks at an event hosted by the Bank of Japan. Text and Q&A are expected. On April 7th, Jefferson said he saw “our current policy stance as appropriately positioned to allow us to assess how the economy evolves.” Jefferson said he “remain[s] cautious about [the] outlook,” as “uncertainty about the economy is elevated, and the rise in energy prices and the conflict in the Middle East add to that uncertainty.”
• 10:25 PM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will take part in a panel on monetary policy and the world economy at an event hosted by the Bank of Japan.

Thursday, May 28 

• 08:30 AM Personal income, April (GS +0.5%, consensus +0.4%, last +0.6%); Personal spending, April (GS +0.7%, consensus +0.5%, last +0.9%); Core PCE price index, April (GS +0.29%, consensus +0.3%, last +0.3%); Core PCE price index (YoY), April (GS +3.31%, consensus +3.3%, last +3.2%); PCE price index, April (GS +0.44%, consensus +0.5%, last +0.7%); PCE price index (YoY), April (GS +3.78%, consensus +3.8%, last +3.5%): We estimate that personal income and spending increased by 0.5% and 0.7%, respectively, in April. We estimate that the core PCE price index rose 0.29% in April, corresponding to a year-over-year rate of +3.31%. Additionally, we estimate that the headline PCE price index increased 0.44% in April, or increased 3.78% from a year earlier.
• 08:30 AM GDP, Q1 second release (GS +2.0%, consensus +2.0%, last +2.0%); Personal consumption, Q1 second release (GS +1.7%, consensus +1.7%, last +1.6%); Core PCE inflation, Q1 second release (GS +4.26%, consensus +4.3%, last +4.3%): We estimate no revision on net to Q1 GDP growth at +2.0% (quarter-over-quarter annualized), reflecting an upward revision to consumer spending growth (+0.1pp to +1.7%) due to stronger utilities and public transportation details in the quarterly census survey (QSS), offset by downward revisions to inventory accumulation and net exports growth.
• 08:30 AM Initial jobless claims, week ended May 23 (GS 210k, consensus 212k, last 209k): Continuing jobless claims, week ended May 16 (consensus 1,780k, last 1,782k)
• 08:30 AM Durable goods orders, April preliminary (GS +1.0%, consensus +3.9%, last +0.8%); Durable goods orders ex-transportation, April preliminary (GS +0.4%, consensus +0.5%, last +0.9%); Core capital goods orders, April preliminary (GS +0.3%, consensus +0.4%, last +3.4%); Core capital goods shipments, April preliminary (GS +0.5%, consensus +0.6%, last +1.2%): We estimate that durable goods orders increased 1% in the preliminary April report (month-over-month, seasonally adjusted) based on our tracking of commercial aircraft orders. We forecast a 0.3% increase in core capital goods orders—reflecting the continued increase in the new orders components in manufacturing surveys in April but payback for an outsized increase in the series itself in March—and a 0.5% increase in core capital goods shipments—reflecting the continued increase in core capital goods orders in recent months.
• 08:55 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver a speech at the Reykjavik Economic Conference in Iceland. Text and moderated Q&A are expected. On May 14th, Williams said monetary policy was “in a good place,” which he characterized as “mildly restrictive,” and noted that he did not “see that there’s any reason to raise rates right now, or lower rates.”
• 10:00 AM New home sales, April (GS -3.0%, consensus -3.5%, last +7.4%) 
• 10:15 AM St. Louis Fed President Musalem (FOMC non-voter) speaks: St. Louis Fed President Alberto Musalem will deliver a speech at the Reykjavik Economic Conference in Iceland. On May 6th, Musalem said that “the risks have been shifting towards more risk on the inflation side than the employment side” and that “there are very plausible scenarios under which the economy would require us to keep the policy rate at its current level for some time.”
• 03:00 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will take part in a fireside chat at the Johns Hopkins Carey Business School in Washington, DC. Moderated Q&A is expected. On May 21st, Barkin noted that “with inflation above our 2% target for over five years now, it’s worth asking whether the cumulative impact of so many waves risks loosening the anchor.” At the same time, Barkin emphasized downside risks to employment from AI, noting that “everyone I talk to is talking about AI and AI-related job loss.”

Friday, May 29 

• 06:50 AM Kansas City Fed President Schmid (FOMC non-voter) speaks: Kansas City Fed President Jeffrey Schmid will deliver a speech at the Reykjavik Economic Conference in Iceland. Text and moderated Q&A are expected. On May 14th, Schmid said that “continued inflation [is] the most pressing risk to the economy,” while “unemployment remains relatively low by historical standards, and the labor market is functioning effectively.”
• 08:30 AM Advance goods trade balance, April (GS -$84.0bn, consensus -$86.4bn, last -$87.4bn): We estimate that the goods trade deficit narrowed by $3.4bn to $84.0bn, driven by a decline in imports of computers and other electronic products from Asia.
• 09:10 AM Fed Vice Chair for Supervision Bowman speaks: Fed Vice Chair for Supervision Michelle Bowman will deliver a speech on monetary policy at the Reykjavik Economic Conference in Iceland. Text is expected.
• 09:15 AM Philadelphia Fed President Paulson (FOMC voter) speaks: Philadelphia Fed President Anna Paulson will take part in an event hosted by The Chamber of Commerce Southern New Jersey. Audience Q&A is expected. On May 19th, Paulson said that she saw the current stance of policy as “mildly restrictive and that restrictiveness is helping to keep inflation pressures in check while the labor market remains stable.” As a result, Paulson noted, “keeping rates steady allows us to assess how the economy is evolving and the risks to both price stability and the labor market.” Paulson said that “assuming the labor market remains in balance, rate cuts would only become appropriate once we have seen sustained progress on inflation.” She also noted that she thought it was “healthy that market participants have taken on board scenarios where the funds rate remains unchanged for an extended period, as well as scenarios where further tightening becomes necessary.”
• 10:00 AM Wholesale inventories, April preliminary (consensus +0.4%, last +0.6%)
• 12:40 PM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will speak at the 2026 Reagan National Economic Forum in Simi Valley, California. On May 7th, Daly said that she thought “the phrasing of the [FOMC’s post-meeting] statement is less important than the actions.” Daly noted that “if the [Middle East] conflict ends and oil prices come back down and that doesn’t get passed into the broader economy, then I expect the underlying dynamics that we were facing prior to the conflict to return.” Daly characterized the current monetary policy stance as “slightly restrictive,” which would help put some downward pressure on inflation. She noted that she did not see the labor market as a source of inflationary pressure.

Source: DB, Goldman