The core personal consumption expenditures price index, which excludes food and energy expenses, is expected to rise 0.3%, following its largest monthly gain in a year. The entire metric is expected to rise 0.4%, the most since September.
That would put annualised core price rise over the last three months at its strongest rate since May. On a six-month annualised basis, the core PCE price index would also accelerate. Furthermore, some analysts expect the January data to be revised upward after recent government reports on consumer and producer prices.
This contrasts with the end of 2023, when inflationary pressures appeared to be returning to the Fed’s target of 2%.
Fed Chair Jerome Powell emphasised the bigger theme of a slow but difficult route to returning inflation to goal as he and his colleagues left interest rates unchanged for a fifth meeting. Price data this year has neither increased nor decreased policymakers’ confidence, he said.
Among the other economic announcements scheduled for the holiday-shortened week, the government will post February new-home sales data on Monday, followed by durable goods orders on Tuesday. On Thursday, the third estimate of fourth-quarter GDP will incorporate government income and company earnings data.
What Bloomberg Economics says:
“The robust employment report and retail-sales bounce in February signal that the month’s personal income and outlays report will also be hot. Hiring, pay growth, and an increase in hours worked will all enhance personal income. Personal expenditure is likely to have increased as a result of vehicle sales, but spending in other categories looks to have remained flat. Even as the core moderates, headline PCE inflation is projected to increase.
Elsewhere, prospective Swedish rate cuts, as well as inflation figures from Australia to France, might shift the needle on important currencies. Nigeria’s central bank might announce a significant rate rise.
Click here to see what occurred last week, and below is a summary of what’s coming up in the global economy.
Asia
A lot of inflation reports are due in the next week. In Australia, the most recent price report may support the central bank’s decision to remain in data-dependent mode for a little longer before shifting to an easing cycle in response to slowing GDP.
Wednesday’s data is likely to reveal that inflation accelerated slightly in February, to 3.5%.
Price data for the Tokyo region, a leading indicator for the national gauge, are anticipated to show inflation remaining at or over the Bank of Japan’s goal for the 24th consecutive month in March.
Such a result would leave a second-half rate rise within reach after authorities took the historic step of eliminating negative borrowing rates on Tuesday, becoming the world’s last central bank to do so.
Consumer inflation is expected to drop somewhat in Singapore and Malaysia when the data are issued on Monday.
Aside from consumer pricing data, China can evaluate how its factories are doing using industrial profit statistics from the first two months of the year.
Australia’s retail sales growth is expected to decelerate to 0.5% in February, and the country will also get consumer confidence statistics for March.
Thailand’s export growth may have slowed last month, and Hong Kong also receives trade statistics.
Following monetary pyrotechnics throughout the world in the last week, including the Swiss National Bank’s surprise decision to decrease interest rates, Sweden’s turn comes on Wednesday.
The Riksbank will spell out a strategy for dealing with inflation subsidisation. The world’s oldest central bank has stated that it may decrease borrowing prices in the first half of this year, and its advice should indicate whether the move would occur in May, June, or later.
While recent inflation data has been mild, authorities warn that there is still a potential of more price increases. Most fixed-income investors polled by SEB this week anticipate the Riksbank will keep its base rate at 4% until at least June.
Hungary will make Europe’s other major monetary choice on Tuesday. Officials are expected to delay their pace of reduction to the European Union’s highest interest rate after a disagreement between the government and the central bank frightened investors and pounded the forint.
Among other highlights in the eurozone, European Central Bank President Christine Lagarde will speak on Monday.
Inflation statistics for Spain are expected for release on Wednesday, followed by Italy and France on Friday. Together, they may indicate the anticipated direction of the euro-zone number, which is slated to be released the following week.
In the UK, Bank of England policymaker Catherine Mann — one of two hawks who voted against raising interest rates at Thursday’s meeting — will give a productivity lecture in Belfast on Monday.
Mexico’s trade surplus with the United States is expected to increase further in February, setting a new record. It’s difficult to picture former President Donald Trump, the expected Republican contender for 2024, leaving that alone. February labour market data and monthly loans are also expected.
Argentina’s January economic activity update builds on statistics that showed output decreased in the fourth quarter and year to date. Most experts expect a deeper first-quarter drop.
Along with February unemployment, Chile publishes five additional variables, including retail sales and industrial output.
Banco Central do Brasil is scheduled to release the minutes of its March meeting, during which it slashed interest rates by half a point to 10.75% for the sixth consecutive time.
The minutes, together with the quarterly inflation report, which will update key economic predictions, may give light on how policymakers are reacting to a recent run of higher-than-expected inflation readings.
Brazil watchers will also have some concrete statistics to ponder, including the country’s broadest indicator of inflation, the mid-month print of the benchmark IPCA inflation index, and February unemployment.