No Surprise in PCE Inflation as Core Cools to 2.6%
March’s inflation numbers have landed right where economists expected, signaling little reason for the Federal Reserve to make any immediate policy shifts.
With annual PCE inflation holding steady at 2.3% and the core rate easing to 2.6%—its lowest level since mid-2024—the odds of an interest rate cut at the upcoming May meeting appear increasingly slim.
The Personal Consumption Expenditures (PCE) index, favored by the Fed as its go-to inflation barometer, showed no monthly change, reinforcing the view that pricing pressures may be cooling—but not fast enough to trigger a pivot.
Despite signs of labor market softness, including job openings hitting a four-year low, the central bank remains cautious.
Chair Jerome Powell reportedly remains focused on the potential inflationary impact of new trade tariffs, adding another layer of hesitation around easing rates.
Market sentiment reflects this cautious stance. Data from CME’s FedWatch tool shows over 92% of traders expect rates to hold steady in May, with similar predictions echoed on Polymarket.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
