PCE Methodology Change Lowers Inflation Reading
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- U.S. Bureau of Economic Analysis revised its data sources, trimming the headline PCE inflation number and meeting market expectations.
- Federal Reserve sees the dip as a temporary reprieve, but its preferred core‑inflation gauge remains stubbornly high, warning of lingering price pressures.
- Markets surged on the softer inflation print, with equities rallying and bond yields falling as investors priced in a possible pause in rate hikes.
- Consumer Spending barely rose, and GDP growth slowed, indicating a fragile economy that could temper any optimism from the inflation dip.
- War in Iran is pushing commodity costs up (NYT), while U.S. Tech Giants expand into the Persian Gulf (NYT), adding geopolitical and sector‑specific volatility to the backdrop.
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