🇺🇸❗️Cable FX Macro Weekly Note: Core PCE Deflator

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The Core PCE Price Index increased by 2.6% Y/y in March 2025, down from 3.0% in February 2025, indicating easing inflationary pressures. The M/m figure came in at 0.0%, compared to a 0.4% increase in February, reflecting a significant slowdown in monthly price growth.

The decline in the index aligns with the Federal Reserve’s 2% inflation target, though it remains slightly above. The 0.0% MoM reading suggests inflation is stabilizing, potentially giving the Fed room to maintain or adjust monetary policy.

Economists at Wells Fargo penciled in the headline PCE deflator up 0.1% on the month, bringing the year-over-year rate to 2.2%. Furthermore, they estimate the core PCE deflator rose 0.1% in April, bringing the year-over-year rate to 2.6%. Wells Fargo looks for personal income growth to register a 0.3% gain, and personal spending to rise 0.2%.