The personal consumption expenditure (PCE) index in the United States is expected to grow at an annual rate of 2.6% in March, higher than the Federal Reserve's target of 2%. The annualized inflation rate in the first quarter increased from 1.8% to 3.4%, indicating an increase in inflationary pressure.

Economists predict that the core inflation rate will slightly drop to 2.7%, and the Federal Reserve will closely monitor this indicator to evaluate interest rate policy. Persistent high inflation may prompt the Federal Reserve to maintain high interest rates to curb economic overheating.

March PCE Index Forecast

The PCE index for March in the United States is expected to grow at an annual rate of 2.6%, accelerating from February's 2.5% and still above the Federal Reserve's target level of 2%. This data has a significant impact on the Federal Reserve's formulation of national monetary policy.

GDP report reveals inflationary pressure

According to the latest released US Gross Domestic Product (GDP) report, the annualized inflation rate in the first quarter climbed from 1.8% in the fourth quarter of 2023 to 3.4%. This growth rate may suggest that the inflation data in March was higher than economists expected, or that the data from the previous months was revised upwards.

The impact of core inflation on interest rates

Despite significant overall inflationary pressures, economists expect that the core inflation rate, excluding fluctuations in food and energy prices, may slightly decrease from 2.8% in February to 2.7%. The core PCE is considered a key indicator by the Federal Reserve to assess inflation trends, as it is not affected by factors such as weather.