Let’s break down and interpret the macro data from the past few days. On March 13, the U.S. January personal income and spending data was released. Here’s the breakdown: - Personal income MoM +0.4%, disposable income +0.9%, nominal PCE spending +0.4%, but real PCE only increased by 0.1%. - January PCE price index MoM +0.3%, core PCE MoM +0.4%, with YoY increases of +2.8% and +3.1%, respectively. - Meanwhile, the personal savings rate returned to 4.5%. The U.S. household balance sheet seems to have stabilized, but similar to China, there’s no real consumption momentum. Saving takes priority over investing and spending, and core inflation remains sticky. On the same day, the second reading of the U.S. Q4 2025 GDP data revealed more: Real GDP annualized growth was revised down from the initial estimate of 1.4% to 0.7%, while real final sales to private domestic purchasers, which reflect endogenous demand, were only 1.9%. At the same time, the gross domestic purchases price index rose to 3.8%. Not much has changed from the last analysis—the core issue for the U.S. remains stagflation, with slowing growth and rising prices. The January JOLTS data trend was also unsurprising: jobs are available, but hiring is sluggish, and there’s little job-hopping. This might be related to the impact of AI. Additionally, there are a few interesting data points on FRED that I personally find much more significant than the mainstream data: The 5-year breakeven inflation rate rose from 2.53% on March 10, to 2.58% on March 11, and then to 2.61% on March 13. Meanwhile, the 5-year forward inflation expectation fell from 2.14% on March 11, to 2.13% on March 12, and then to 2.11% on March 13. You’ll notice these two sets of data are actually bullish for the overall macro fundamentals and risk assets (like the stock market). The rise in the 5-year breakeven inflation rate corresponds to current geopolitical conflicts, tariffs, and other supply chain issues, which are driving inflation expectations higher. However, the decline in the 5-year forward inflation expectation suggests that the market believes the current inflation spike is temporary or caused by external shocks. Over a longer horizon, the Fed is still seen as capable of keeping long-term inflation near its 2% target. Maybe the Fed’s credibility isn’t as bad as Trump claimed. Next up is the FOMC meeting on the 17th and 18th. It’s highly likely they’ll adopt a dovish tone and signal no immediate action.