US Core PCE price index plateauing inflation
The Federal Reserve's preferred measure of US inflation eased from multi-decade highs last month. US Core PCE Price index for March came in at 5.2%, lower than 5.3% February's print and analysts' expectations for March. In contrast, the employment cost index (ICE) for Q1 exceeded expectations coming in at 1.4%.
Upward pressures on prices may be behind, and now an important question is whether growth in futures prices will mean-revert to lower levels or will they remain at elevated levels. If it’s the latter, it may not provide too much optimism to stocks, whereas the former would reduce the uncertainty regarding Fed's tightening plans, and hence provide a more favourable environment for stocks.
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