PCE Preview: Core Inflation Remains Stubbornly Above Expectations, Federal Reserve May Hold Rates Steady for the Third Consecutive Time

BlockBeats News, April 9 – The market expects that US February PCE data will indicate continued high inflationary pressure. According to consensus forecasts, February PCE may rise by 0.4% month-on-month and remain at 2.8% year-on-year; core PCE is about 3.0% year-on-year, significantly above the Federal Reserve's 2% target.

Analysts point out that the primary drivers behind this round of inflation rebound are the recovery in commodity prices and rising energy costs, while “super core services inflation” remains highly sticky and is unlikely to decline significantly in the short term.

Against this backdrop, the Federal Reserve is expected to maintain the 3.50%–3.75% interest rate range at its April policy meeting, achieving a third consecutive pause in rate cuts.

Market pricing has also shifted rapidly: currently, over 97% of traders are betting on no change in April, expectations for rate cuts this year have cooled significantly, and the mainstream view has shifted towards a “later, fewer” easing path.