Core PCE holds at 2.6%, but past revisions highlight persistent inflation risks
Headline PCE inflation beats forecasts, reducing chances of early Fed rate cuts
Flat monthly core data contrasts with hotter past prints, clouding Fed’s outlook
Newly released U.S. inflation data from the Personal Consumption Expenditures (PCE) report presents mixed signals for markets and the Federal Reserve. While some figures point to cooling price pressures, others suggest inflation remains sticky enough to delay interest rate cuts. This could keep the Federal Reserve cautious ahead of its upcoming May meeting.
The core PCE price index, which excludes food and energy, held steady year-over-year at 2.6% in March. This matched expectations but came against the backdrop of upward revisions to prior readings.
At the same time, overall PCE inflation rose 2.3% year-over-year, higher than the 2.1% forecast. Month-over-month numbers showed even more contrast, with core prices flat the lowest monthly figure since April 2020.
U.S. core PCE price index (YoY) for March came in at 2.6%, the lowest since June 2024, matching expectations. The previous value was revised up from 2.8…
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