{"id":187730,"date":"2023-03-31T11:00:00","date_gmt":"2023-03-31T15:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=187730"},"modified":"2023-03-31T10:31:29","modified_gmt":"2023-03-31T14:31:29","slug":"feds-preferred-inflation-measure-comes-in-cooler-than-expected-as-banking-crisis-complicates-powells-plan","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/feds-preferred-inflation-measure-comes-in-cooler-than-expected-as-banking-crisis-complicates-powells-plan\/","title":{"rendered":"Fed&#8217;s Preferred Inflation Measure Comes In Cooler Than Expected As Banking Crisis Complicates Powell&#8217;s Plan"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">ZINGER KEY POINTS<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The bond market is&nbsp;pricing in a 55.8% chance of another 0.25% Fed rate hike in May.<\/li>\n\n\n\n<li>Core PCE, the Federal Reserve&#8217;s preferred inflation measure, was up 4.6%.<\/li>\n<\/ul>\n\n\n\n<p>Index ETFs on the<strong> S&amp;P 500<\/strong>&nbsp;<a href=\"https:\/\/www.benzinga.com\/quote\/spy\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a>traded higher by 0.3% on Friday morning after the Bureau of Economic Analysis reported a 5% increase in the personal consumption expenditures price index in the month of February, suggesting the Federal Reserve still has a long way to go in its&nbsp;<a href=\"https:\/\/www.benzinga.com\/topic\/inflation\" target=\"_blank\" rel=\"noreferrer noopener\">battle against inflation<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Happened:<\/strong>&nbsp;<\/h2>\n\n\n\n<p>The headline PCE rose 5% in February, down&nbsp;from 5.4% in January and a 2022 high of 6.8% in June. The February PCE reading came in below&nbsp;economist estimates of a 5.3% gain.<\/p>\n\n\n\n<p>Core PCE, which excludes&nbsp;<a href=\"https:\/\/www.benzinga.com\/money\/most-volatile-stocks\/\" target=\"_blank\" rel=\"noreferrer noopener\">volatile<\/a>&nbsp;food and energy prices and is the preferred inflation measure for the Federal Reserve, was up 4.6% in February, below&nbsp;economist estimates of a 4.7% gain.<\/p>\n\n\n\n<p>The latest CPI inflation reading comes after the Federal Reserve issued another 0.25% interest rate hike earlier this month, bringing its fed funds target range to between 4.75% and 5%. The bond market is&nbsp;pricing in a 55.8% chance of another 0.25% Fed rate hike in May.<\/p>\n\n\n\n<p>The Federal Reserve is in a very difficult situation of attempting to continue to bring down inflation even as a banking crisis has undermined Americans&#8217; confidence in the financial&nbsp;<a href=\"https:\/\/www.benzinga.com\/money\/best-sectors-to-invest-in-right-now\/\" target=\"_blank\" rel=\"noreferrer noopener\">sector<\/a>.<\/p>\n\n\n\n<p>At the Fed&#8217;s post-meeting press conference in March, Fed Chair&nbsp;<strong>Jerome Powell<\/strong>&nbsp;said the Federal Open Market Committee is monitoring the credit market closely.<\/p>\n\n\n\n<p>&#8220;Financial conditions seem to have tightened, and probably by more than the traditional indexes say. &#8230; The question for us though is how significant will that be \u2014 what will be the extent of it, and what will be the duration of it,\u201d Powell said.<\/p>\n\n\n\n<p>Earlier this month, the Labor Department reported a 6% increase in the consumer price index in February, down from a 2022 peak of 9.1% in June. The Labor Department also reported that U.S. wages grew 4.6% year-over-year in February.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted March 31, 2023 &#8211; <a href=\"https:\/\/www.benzinga.com\/news\/23\/03\/31607473\/feds-preferred-inflation-measure-comes-in-cooler-than-expected-as-banking-crisis-complicates-powells\">Fed&#8217;s Preferred Inflation Measure Comes In Cooler Than Expected As Banking Crisis Complicates Powell&#8217;s Plan<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The headline PCE rose 5% in February, down from 5.4% in January and a 2022 high of 6.8% in June. <\/p>\n","protected":false},"author":37,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[14921,14797,77,570],"contributors-categories":[13584],"class_list":{"0":"post-187730","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-banking-crisis","13":"tag-core-pce","14":"tag-fed","15":"tag-inflation","16":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Fed&#8217;s Preferred Inflation Measure Comes In Cooler Than Expected As Banking Crisis Complicates Powell&#8217;s Plan<\/title>\n<meta name=\"description\" content=\"The headline PCE rose 5% in February, down from 5.4% in January and a 2022 high of 6.8% in June.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/187730\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed&#039;s Preferred Inflation Measure Comes In Cooler Than Expected As Banking Crisis Complicates Powell&#039;s Plan | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"The headline PCE rose 5% in February, down from 5.4% in January and a 2022 high of 6.8% in June.\" \/>\n<meta property=\"og:url\" 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