US Fed's preferred inflation gauge to back rate-cut hold
Federal Reserve officials are about to get further confirmation that inflation progress has stalled, supporting what appears to be a shift in tone to keep interest rates higher for longer than previously anticipated.
Policymakers' preferred inflation gauge — the personal consumption expenditures price index — probably stayed elevated in March, according to data due in the coming week.
The measure is seen accelerating slightly to 2.6% on an annual basis as energy costs rise. The core metric, which strips out energy and food, is expected to rise 0.3% from the prior month after a similar gain in February.
While the core PCE data may not be as strong as the consumer price index — which topped estimates and rattled markets earlier this month — Fed Chair Jerome Powell and other officials have signaled that it'll take longer for them to gain the necessary confidence in a downward trajectory of inflation before cutting rates.
Policymakers will observe the traditional public-speaking blackout period during the coming week, ahead of their two-day meeting that concludes May 1. The fresh inflation numbers on Friday will be accompanied by March personal spending and income figures. Against a backdrop of healthy job growth, economists project another solid gain in household outlays for goods and services. Income growth is also forecast to accelerate.
Other data for the week include the government's initial estimate of first-quarter growth, which probably cooled from the prior period's robust pace but still ran above what
