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I confirm my intention to proceed and enter this websiteThe U.S. personal consumption expenditure price index (PCE) increased 0.3% month-over-month in February 2024. The increase was lower than the upwardly revised 0.4% rise in January and lower than the forecasted 0.4%. Prices for services went up 0.3%, while prices for goods rose 0.5%. The annual rate edged up to 2.5%, in line with forecasts, from 2.4%, which was the lowest since February 2021.
Meanwhile, the monthly core PCE inflation, which excludes food and energy and is the preferred inflation measure by the Federal Reserve, slowed to 0.3% from an upwardly revised 0.5% in January, matching expectations.
Separately, food prices increased 0.1%, and energy prices soared 2.3%. Finally, the annual core inflation rate slowed to 2.8%, the lowest in about three years, from 2.9%.
(PCE Price Index MoM%,U.S. Bureau of Economic Analysis)
In remarks made at the San Francisco Fed, Chair Powell indicated that the PCE inflation data from February aligned more closely with the Federal Reserve’s expectations, which is a positive development. The recent figures may not measure up to the more favorable data seen last year, yet this does not compel the Fed to rush into reducing interest rates. Patience is key, as policymakers can observe greater certainty before considering rate cuts. Chair Powell elaborated that while the Fed anticipates a decrease in inflation as part of their primary scenario, should this not transpire, the willingness to maintain current rates for an extended period is on the table.
As investors pored over a set of economic data during a low-volume Good Friday trading session, the dollar index retreated, slipping below 104.5 on Friday after previously reaching a six-week peak of 104.7.
(Dollar Index Weekly Chart)
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