Core PCE rises by 0.3%, nearing an annualized rate of 4%, exacerbating fears.

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The latest inflation data paints a worrying picture for the US economy, with core PCE rising by 0.3% and nearing an annualized rate of 4%. January’s figures, already concerning, have been revised upward, exacerbating fears of inflationary pressures. This sustained increase in core PCE underscores a troubling trend of rising costs across various sectors, with gas, energy, housing, insurance, and recreation all witnessing month-over-month surges.

The surge in inflationary pressures is further evidenced by the Supercore PCE, which has escalated on both a 3 and 6-month annualized basis. Alarmingly, market indicators such as Fed Fund futures and OIS Swaps are now signaling a reduced likelihood of rate cuts this year, suggesting growing concerns about the Federal Reserve’s ability to tame inflation.

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With inflationary forces showing no signs of abating and market expectations shifting towards a less accommodative monetary policy, the specter of a resurgent inflationary environment looms large, posing significant risks to economic stability and consumer purchasing power.





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