PCE Inflation Rises in February, Fed Cautious on Rate Cuts

Consumer spending jumps as inflation gauge ticks up for the first time in five months, with the Federal Reserve signaling a careful approach to future rate adjustments.

• The Federal Reserve's closely watched PCE inflation gauge rose to 2.5% year-over-year in February, marking its first increase since September.
• Core PCE, excluding food and energy, increased by 2.8% year-over-year, slightly down from January's 2.9%, but still above the Fed's 2% target.
• Consumer spending surged by 0.8% in February, driven by strong wage growth and drawing from savings, indicating resilience in the U.S. economy.
• Despite the uptick in inflation, the Fed remains cautious, with Chair Jerome Powell emphasizing a gradual approach to rate cuts, aiming for a
• The Fed's anticipation of three rate cuts in 2024 remains, with market expectations leaning towards a June start, influenced by persistent inflation readings.

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