Headline Personal Consumption Expenditures (PCE) rose 0.7% in March, driven largely by a surge in gas prices tied to Middle East tensions, lifting the annual rate to 3.5%. The Fed’s preferred inflation measure, core PCE (which excludes food and energy), increased a more moderate 0.3%, with the annual rate at 3.2%.
What’s the bottom line?
Inflation is still running above target, reinforcing the Fed’s cautious approach. It also helps explain why some policymakers are in no rush to cut rates as they weigh mixed signals across the economy.
