Fed Officials Await CPI, PCE, Durable Goods Data
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- March employment data showed headline payrolls +178k and private payrolls +186k, far exceeding expectations, while the unemployment rate fell to 4.26% and labor force participation slipped to 61.9%.
- Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook on Tuesday, and Chicago Fed President Austan Goolsbee will also speak, providing insight into how they internalize the latest jobs data.
- FOMC minutes from the March meeting, released Wednesday, indicated a median expectation of one rate cut this year, a slight rise in the long‑run dot to 3.1%, and continued hawkish language from some officials.
- Deutsche Bank forecasts a 25% jump in gasoline prices to lift headline CPI by 0.95% month‑over‑month in March, pushing annual CPI from 2.4% to 3.4% and core CPI from 2.5% to 2.7%.
- February durable goods orders are expected to decline 5% headline, with ex‑transportation orders up 0.4% and core capital goods orders and shipments each rising 0.5% and 0.4% respectively, reflecting weaker commercial aircraft demand.
- February PCE report is projected to show core PCE deflator annualized three‑month rate at 4.5% and six‑month rate at 3.5%, while supercore services inflation remains above its 20‑year average.
Why it matters: The stronger‑than‑expected jobs numbers and projected CPI surge tighten the Fed’s inflation‑vs‑growth trade‑off, making an early rate‑cut less probable and keeping borrowing costs higher for consumers and businesses, while rising gasoline prices could lift core inflation expectations and may pressure the Fed to maintain a hawkish stance.
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