The PCE price index, or Personal Consumption Expenditures price index, like the CPI, reflects changes in prices for living consumer goods and services. It is a key indicator of consumer inflation in the United States. The core PCE price index excludes food and energy—two categories that have significant price fluctuations—therefore it is considered a more stable inflation indicator that can more accurately reflect long-term inflation trends.
Data Analysis and Views
The core PCE price index rose by 3.2% year-on-year, while the overall PCE reached 3.5%, far exceeding the 2% target line. The Federal Reserve's statement directly pointed out: "Inflation remains high, partly reflecting the recent rise in global energy prices." Brent crude oil surged 6% that day to $118 per barrel, hitting a new high since 2022.

Looking at employment: the unemployment rate remained at 4.3%, with "moderate growth" in new jobs, but the growth momentum has significantly weakened. Powell acknowledged at the press conference that the job market is "slightly cooling."

Energy prices are soaring, inflation is burning, and employment is shrinking—these three variables appearing simultaneously have made the Federal Reserve's interest rate decisions an unsolvable equation.

The Federal Reserve is adopting a wait-and-see attitude, mainly due to the volatility in energy prices stemming from tensions in Iran, with rising fuel costs being directly passed on to consumers, making the inflation outlook increasingly unclear. Therefore, even though political pressure for looser monetary policy is increasing, the Federal Reserve still finds it difficult to take action on lowering interest rates.

The Federal Reserve is at a critical moment, with Chairman Powell's term set to expire on May 15. The market is shifting its focus to the popular successor candidate, Waller, whose traditional interpretation of price stability and the Federal Reserve's functions further reinforces market expectations—that even if economic growth slows, monetary policy will remain firm with the primary goal of combating inflation.

In addition, Morgan Stanley announced it would abandon its previous forecast for a rate cut by the Federal Reserve in 2026, now expecting rate cuts to begin next year. The firm pointed out that inflation is still above the Federal Reserve's 2% target and that recent economic data show growth and the labor market remain strong, reducing the urgency for further policy easing, thereby raising the threshold for rate cuts, and the Federal Reserve is prepared to continue waiting.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。