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Fed favorite inflation figure ticks up to 1.4% – focus

The Core Personal Consumption Expenditure Price Index, aka Core PCE, stands at a level of 1.4% y/y in February. higher than 1.3% in January. Last week, we learned that the general Core CPI also moved up, and stands at 1.7% y/y.

While this is not steaming hot inflation in any way, it provides yet another sign that in one of the Fed’s mandates, everything is A-OK.

Month over month, Core PCE rose 0.1%, as expected and like the previous month.  Personal income rose 0.4% m/m on top of an  upwards revision to  January’s number.  Personal  spending fell short with a rise of only 0.1% in February.

The US dollar was slightly stronger in the wake of the new week, especially against the yen. USD/JPY flirted with 120. The greenback is also gaining ground against the euro and the pound, but movements are move contained.

After a long losing streak of US indicators, the mix of indicators became somewhat more positive last week: with beats in inflation, new home sales and jobless claims. Nevertheless, the fall in durable goods orders is certainly worrying.

The big event of the week awaits us at the end: Non-Farm Payrolls. This is the definitive number for the Fed, that focuses more on jobs than on inflation. The publication, on Good Friday, means that movements could be extreme due to low liquidity.

More:  EUR/USD: Correction Or Trend Change? – Nordea

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.