US PCE Readings and Chair Powell Remarks

 We had the release of the U.S PCE Report which broadly came in line with consensus expectations.

Snapshot	▲ YoY	▲ MoM	▲ 3M Change	▲ 6m Change
Headline PCE	2.45%	0.33%	3.35%	2.50%
Core PCE	2.78%	0.26%	3.47%	2.87%
Durable Goods	-2.02%	0.19%	-0.26%	-1.76%
Non Durable Goods	0.76%	0.66%	0.66%	-0.82%
Services	3.81%	0.26%	4.84%	4.33%
Energy Goods & Services	-2.30%	2.30%	2.26%	-4.24%
Headline CPI	3.17%	0.44%	3.93%	3.18%
Core CPI	3.76%	0.36%	4.12%	3.82%

 PCE Price Index for Feb rose 0.33% mom and Core PCE Prices rose 0.26% mom following a 0.38% mom and 0.45% mom reading in the prior month. The Goods inflation number after decelerating for better part of 2023 registered an uptick in the month of February. Durable Goods grew at 0.20% mom while the Non-Durable Goods category rose 0.66% mom. Some welcome relief on the services inflation as it grew 0.26% after the sharp bump higher in the month of January rising 0.26% mom. With the rise in Energy Prices, naturally, energy goods and services registered a 2.30% rise mom.

The PCE numbers were largely ok though the 3m and 6m annualized pace do not paint a rosy picture. Reckon the data does little to alter the macro economic picture.

Remarks from Chair Powell on Friday alienated to the theme of gaining more confidence on sustained downtrend in inflation trajectory, focus on dual mandate, gradually rolling of BS run off to avoid repeating Sep 19 money market stress and neutrality to Political Calendar and the base case for growth to sustain and recession as unlikely.

The markets were closed on Friday hence market reaction to the PCE readings will be front and centre when we open on Monday after the long holiday.