Inflation News
This morning’s big news was March’s Personal Consumption Expenditures (PCE) index readings that were in the monthly Personal Income and Outlays report. Both the overall and core PCE readings matched forecasts of a 0.3% monthly rise, but the year-over-year versions rose 0.1% more than expected. These readings are highly relevant because they are the Fed’s preferred inflation gauges. The numbers indicate the retraction in inflation seems to have stalled, raising the question again of what the Fed will do next with monetary policy and when they may act. Still, it appears that yesterday’s GDP data scared bond traders into thinking today’s readings would be stronger than they actually were. Accordingly, we are seeing more or less a sigh of relief rally in today’s trading.