Fed’s Favorite Inflation Indicator Re-Accelerates In February As Savings Rate Soars

Fed’s Favorite Inflation Indicator Re-Accelerates In February As Savings Rate Soars

The Fed’s favorite inflation indicator – Core PCE – printed hotter than expected in February, rising 0.4% MoM, bring prices up 2.8% YoY…

Source: Bloomberg

Durable Goods & Services costs were the big driver of the reacceleration…

Source: Bloomberg

Disappointingly sticky is the phrase that comes to mind, while the headline PCE rose 0.3% MoM as expected with the YoY price change slowing modestly…

Source: Bloomberg

Under the hood, Services costs dominated the headline gains…

Source: Bloomberg

Perhaps most troubling was the sizable rebound in so-called SuperCore PCE (Services Ex Shelter)…

Source: Bloomberg

With Housing and Non-Profits seeing prices surge MoM…

Source: Bloomberg

Meanwhile, as prices rose, so did personal income, jumping 0.8% MoM – the most since Jan 2024, considerably outpacing the 0.4% rise in personal spending…

Source: Bloomberg

The income to spending differential sent the savings rate to its highest since June 2024

Source: Bloomberg

Finally, is this the start of the 70s-esque rebound in inflation?

Source: Bloomberg

Does this look like it’s going to be ‘transitory’ again?

Tyler Durden
Fri, 03/28/2025 – 08:50

https://www.zerohedge.com/markets/feds-favorite-inflation-indicator-re-accelerates-february-savings-rate-soars