Core PCE Price Index for February to Be Released on March 28
Year-on-Year Increase Expected at 2.7%, Signaling Larger Gains
Manufacturing PMI and Consumer Confidence Index Also to Be Announced
Attention on Possible Hints About Reciprocal Tariffs on April 2
Amid growing concerns about a rebound in tariff-driven inflation, Wall Street's attention this week is focused on inflation indicators. As April 2, the date when the U.S. is set to announce reciprocal tariffs, approaches, messages related to these tariffs from the Donald Trump administration are expected to significantly shake the market.
According to the U.S. Department of Commerce on the 23rd (local time), the core Personal Consumption Expenditures (PCE) price index for February will be released on the 28th. Excluding the highly volatile food and energy sectors, the core PCE price index shows the underlying trend of inflation and is the inflation indicator most closely watched by the Federal Reserve (Fed).
Last month, the core PCE price index is expected to have risen 2.7% year-on-year based on Bloomberg's estimates, an increase from January's 2.6%. On a month-to-month basis, a 0.35% rise is anticipated, up from January's 0.28%. Price increases across goods, healthcare, and financial services likely offset declines in other sectors.
Since the Fed mentioned the impact of tariffs at the Federal Open Market Committee (FOMC) regular meeting held on the 19th, lowering this year's growth forecast and raising inflation projections, attention is even more focused on the upcoming inflation data release. Anna Wong, an economist at Bloomberg Economics, analyzed ahead of the February core PCE price release, stating, "Given robust inflation and solid spending prospects, the Fed's decision at the March FOMC meeting to hold interest rates steady and raise inflation forecasts is likely to appear justified."
With recent cooling in consumer sentiment, the Conference Board's (CB) March Consumer Confidence Index, to be released on the 25th, is also drawing attention. The consumer confidence index, which reflects consumers' confidence in the U.S. economy, is expected to drop 4.1 points to 94.2 this month from 98.3 in the previous month. Following a 7.0-point decline in February, consumer sentiment is projected to continue deteriorating with an additional drop in March.
Several other key economic indicators will also be released. The S&P Global Manufacturing and Services Purchasing Managers' Index (PMI) for March, which gauges manufacturing and service sector activity, will be published on the 24th. Weekly initial jobless claims and the finalized GDP growth rate for the fourth quarter of last year will be released on the 27th.
Additionally, speeches by Fed officials are scheduled this week. Key Fed figures such as Raphael Bostic, President of the Atlanta Federal Reserve Bank; John Williams, President of the New York Federal Reserve Bank; Neel Kashkari, President of the Minneapolis Federal Reserve Bank; and Thomas Barkin, President of the Richmond Federal Reserve Bank, will deliver public remarks.
Wall Street is also watching closely for any additional hints regarding the reciprocal tariffs to be announced on April 2, which President Trump has dubbed "Liberation Day." As the stock market continues to fluctuate amid tariff policy uncertainties, messages from President Trump and his aides remain a key point of interest. On the 21st, President Trump stated regarding reciprocal tariffs, "There will be flexibility, but basically it will be reciprocity."
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