📝Robust Svcs Demand to Keep Inflation Sticky: BMO

The U.S. ISM services PMI fell just a tick to 55.1 in February. That was better than expected and marks an expansion for the second straight month. Recall, January’s report confounded expectations with the gauge zooming firmly into expansionary terrain, up 6 pts—the biggest jump in 2½ years.

The ISM services PMI barely wavered in February after unexpectedly galloping 6 pts in the prior month—the biggest jump since June 2020. Looking ahead, momentum for the still-strong services sector will depend on labour market conditions. Robust services demand could keep inflation sticky, putting more pressure on the Fed to keep going with rate hikes. - BMO