- Prior 2.8% (unrevised to 2.8%)
- PCE Core YoY 2.8% vs 2.7% estimate
- PCE Core MoM 0.3% vs 0.3% estimate.
- Prior MoM +0.3% unrevised to 0.3%
- Headline PCE 2.7% vs 2.6% estimate
- Headline MoM PCE 0.3% vs 0.3% expected
- For the full report CLICK HERE
Consumer spending and consumer income for March:
- Personal income 0.5% vs 0.5% estimate. Prior month 0.3%.
- Personal consumption 0.8% vs 0.6% estimate. Prior month 0.8%
- Real personal spending 0.5% vs 0.5% last month (revised from 0.4%).
The core PCE rise was 0.32% out to 2 decimal places. So on the topside of 0.3%. This is better than was feared. Yesterday, the whispers were for a 0.4% and perhaps closer to 0.5%.
It looks like the higher PCE from yesterday''s GDP PCE was in January. January can be wonky due to end of year/beginning of year volatility. Having said that, the progress on inflation is stalled (see chart above). The Fed target is still down at 2.0% with some thinking if they got to 2.5% it would give them some ammunition to take out some of the restrictive monetary conditions.
The rate cut expectations is only marginally higher in September vs the 58% chance prior to the report.
US stocks moved higher initially (NASDAQ is up around 180 points), but have come off a bit. US yields are a few basis points lower:
- 2-year yield 4.974%, -2.5 basis points
- 5-year yield 4.681%, -3.5 basis points
- 10 year yield 4.658%, -4.7 basis points
- 30-year yield 4.768%, -5.2 basis points
That compares to start of the US session levels:
- 2-year yield 4.999%
- 5-year yield 4.708%
- 10-year yield 4.685%
- 30-year yield 4.791%
