Inflation slowdown, household spending rebounds, reflecting signs of economic recovery, but the Federal Reserve remains cautiously observant.

Inflation data slows down: One of the inflation indicators favored by the Federal Reserve, the core Personal Consumption Expenditures (PCE) Price Index, has shown signs of slowing down in the past month, with a monthly increase of 0.3%, lower than the previous month's 0.5%. The core PCE price index excludes the volatility of food and energy prices and is considered one of the key indicators for measuring inflation levels.

Household spending rebounds: Adjusted consumer spending exceeds expectations, primarily benefiting from significant wage growth, marking the largest increase in over a year. Growth in durable goods and the service sector is the main driver of spending rebound.

The Fed's stance: Despite inflation slowing down, Federal Reserve officials have not considered cutting interest rates yet; they are still waiting for more evidence of sustained inflation decline. Federal Reserve Chairman Jerome Powell emphasized that the current data largely aligns with expectations, reiterating the central bank's cautious stance.

Market reactions and outlook: The closure of U.S. stock and bond markets for Good Friday resulted in relatively limited reactions to this data. Economic analysts anticipate that cooling in the labor market and a slowdown in personal income growth could lead to slower spending growth, speculating that the Fed might take interest rate cut measures in June to address economic slowdown.