Following the favourable CPI and PPI data, we estimate that the core PCE deflator rose by a below-target 0.05% m/m in March. Even taking into account a likely upward revision to the rise in February to 0.50%, that softer gains suggest the annual rate of core PCE inflation fell to 2.6%. Nonetheless, with some signs of tariff pressures coming through in the PPI data, this will be little comfort for the Fed.
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