Tonight's US PCE Data Could Surprise to the Upside, Adding Uncertainty to Fed Rate Cut Prospects

BlockBeats News, March 13, Friday 20:30 Beijing time, the U.S. will release January PCE data, with market expectations of a 2.9% year-on-year increase and a 0.3% month-on-month increase in PCE; core PCE is expected to rise to 3.1%, the largest increase since April 2024.

Analysts point out that although recent CPI data has shown some easing of inflationary pressures, the higher weighting of goods prices in PCE and potential price increases in some goods such as software and jewelry may drive up core PCE. If core PCE year-on-year is significantly higher than CPI, the divergence between the two may reach its highest level in decades.

As the Federal Reserve pays more attention to the PCE index when formulating policy, a rebound in inflation may weaken expectations of interest rate cuts later this year. Meanwhile, the Middle East conflict has pushed up oil prices and may further raise costs for energy, transportation, and food, bringing new upward risks to future inflation trends.