**As seen in Risk In The Week report 04/20/24, subscribe at cablefxm.co.uk/reports
February core PCE deflator rose by 2.8% Y/y, this matched the prior figure and the consensus estimate, however, the January print was revised higher to 2.9%. The contribution from nondurable goods prices increased to 0.17pp while durable goods' negative weight eased to 0.27pp. Financial services prices posted a fourth consecutive month of higher contributions to the core PCE, the component is now adding 0.32pp, the highest since October. One key metric sending signs of relief was food services and accommodation prices which eased to the lowest since April 2021. The March FOMC meeting brought a fresh batch of macroeconomic projections, the Fed sees its preferred measure of inflation rising 2.60% this year, and the forecast for 2026 pencils the gauge hitting the target.
For March the median economist survey sees the core PCE deflator easing to 2.7%, despite the upside in 1Q CPI/PPI prints, this shouldn't sound all that surprising as some of the components driving consumer and producer prices are not taken into account in the PCE blend.
