"I don't see why anyone would think the economy is worse than it was 24 hours ago," he said.
Markets have been sensitive to inflation data, after CPI rose more than expected last week. Fed Chair Janet Yellen, during a press briefing, dismissed the move as "noise," so the PCE data is being closely watched by traders.
Jack Ablin, CIO of BMO Private Bank, said the Fed now may see its economic forecasts as too high, after a revised forecast was released last week.
"Instead of having a reasonable chance of exceeding 3 percent growth for the year, that's a high bar now that we've had one quarter where we dug a big hole. I'm hopeful to have a huge rebound. It leaves the Fed in an awkward spot. It's been forecasting much stronger economic activity all along the way, and they've been disappointed," he said. "I wouldn't be surprised if we saw some inflation pressure. Wages are starting to tighten up a little bit and housing I think, I'm looking at apartment rents are rising pretty steadily."
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Ablin said the disappointment isn't enough to make him sell stocks, though he expects foreign markets to take over leadership. "I'm going to hold my nose and stay in," he said. "You've got pretty big hitters still bullish out there. Anecdotally things sound pretty good."
He said if there was some increase in inflation it could be a good sign for stocks, giving corporations pricing power and lifting revenues.
What to Watch
It could be a big day for IPOs Thursday, as GoPro, the maker of wearable HD action cameras, is expected to start trading. Michaels, the craft store, is expected to price Thursday and begin trading Friday.