PCE Outlook: Core Inflation Stubbornly Above Expectations, Fed May Stay Put for Third Consecutive Time

BlockBeats News, April 9th: Market expectations suggest that US February PCE data will show continued high inflationary pressures. According to consensus estimates, February PCE month-over-month is expected to rise to 0.4%, while year-over-year is expected to remain at 2.8%; core PCE is expected to be around 3.0% year-over-year, significantly above the Fed's 2% target.

An analysis points out that the core drivers of this round of inflation rebound come from the resurgence of commodity prices and the upward pressure on energy costs, while "super-core service inflation" still exhibits strong stickiness and is unlikely to see a significant decline in the short term.

Against this backdrop, the Fed is expected to continue to maintain the 3.50%-3.75% interest rate range at the April policy meeting, achieving a third consecutive rate pause.

Market pricing has also swiftly shifted: currently, over 97% of traders are betting on a hold in April, expectations for rate cuts within the year have significantly cooled down, and the mainstream view is now shifting towards a "later and fewer" easing path.