The Federal Reserve’s primary inflation gauge rose 0.3% in March, with the 12-month headline inflation rate hitting 2.7%. Additionally, the core PCE price index also rose 0.3% in March, maintaining a 2.8% core inflation rate over the past year. Despite fears of rising inflation, the March data was not as bad as expected, leading to a decrease in the likelihood of rate cuts in the near future.
Wall Street is now closely monitoring supercore services inflation, which rose 0.4% in March and 3.5% over the past year. Personal income and spending also saw an uptick in March, with the PCE price index released alongside the Commerce Department’s report. Market pricing reflected a slight decrease in the odds of a rate cut by the Fed following the March PCE report.
The positive news on inflation had a ripple effect on the stock market, with the S&P 500 rising 1% on Friday. This growth was largely driven by strong earnings news from tech giants like Google parent Alphabet and Microsoft. The 10-year Treasury yield also saw a decrease, backing off to 4.67% from 4.71% on Thursday.
Overall, while inflation remains a concern, the March data provided some relief to investors. The stock market responded positively, and expectations for rate cuts by the Federal Reserve have diminished. This indicates that the economy may be better equipped to handle inflationary pressures than initially thought. Stay tuned for further updates on the market and economic trends on Female Arts.
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