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.

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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