US PCE, Jobless Claims, and Fed Williams: Today's Dollar Drivers

The PCE is expected at 4.1% year over year, up from 3.8%. The core measure is seen at 3.4% versus 3.3%. The PCE is rarely a big market mover. It can be accurately forecast from the CPI and PPI releases, which have already been reported. The services component is the Fed's preferred inflation gauge. The July 14 CPI report will carry more weight for the Fed's policy path and the dollar's direction. A PCE print in line with consensus will likely be ignored. A large deviation might cause a brief dollar reaction. The focus will remain on the CPI.

The inflation data feeds into the rate path. A hotter PCE pushes the dollar higher via higher US yields. A softer print weakens the dollar. The market has been pricing in a September rate cut. The PCE will adjust those probabilities modestly.

Fed's Williams speaks late in the US session. He is part of the FOMC's troika – the most influential voices on the committee. In late November 2025 he endorsed a December rate cut. That endorsement triggered a rally in risk assets. He has not made a public policy comment since. Traders will watch for any shift in his tone relative to that November speech. Warsh is noise and the board is the signal. Williams's views matter because he sits on the rate-setting committee.

The combination of PCE data and Williams's speech gives traders a read on the dollar's near-term direction. The July 14 CPI report is the next scheduled catalyst. Williams speaks at 6 p.m. ET.