Data from the US tonight will show strong inflation - but the Fed will shrug it off

As part of the US Q1 GDP release due at 1230GMT on Thursday 29 April 2021 will be the PCE deflator numbers

The consensus expectation for the PCE deflator is 2.4% q/q, up from Q4's reading of 1.3%.

The Federal Reserve mantra right now is that inflation is merely 'transitory and the number will be shrugged off. On Wednesday (US time) we had the FOMC announcement and Fed Chair Powell's press conference following. The Fed confirmed once again it is in dove mode, and that is continuing to weigh on the USD:

• USD continues to lose ground in Asia after Wednesday dovey FOMC and Powell ... Gold doing well

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I've linked to these summaries already, but ICYMI:

• FOMC statement highlights: Rates left unchanged, no change to QE, mild upgrade on economy
• Powell: A transitory rise above 2% inflation this year wouldn't meet standard of moderate overshoot
• Powell Q&A: It's unlikely we would see a persistent rise in inflation with significant slack in labor market
• The full FOMC statement from the April 2021 meeting

And the wrap up is here:

• ForexLive Americas FX news wrap: Dollar slides as Powell rules out taper talk

And:

• Response from WPAC to kick off the Asian day is here
• Further responses to the Federal Reserve FOMC