Chart Of The Day: Close But No Cigar (Yet) On Inflation

2025-03-03 08:30:00 ET

Summary

• The latest MoneyShow Chart of the Day shows the year-over-year change in the two main “core” (excluding food and energy) inflation readings we get each month.
• Core PCE rose just 2.6% year-over-year in January, down from 2.9% in December and the smallest increase in seven months. That’s the good news.
• On the other hand, CPI rose 3.3% YOY in January. That was up from 3.2% in December, halting progress toward the 2s. So... bad news.
• Rate futures markets are pricing in less than a 7% probability of another 25-basis point cut in March. That's far below the 31% chance being priced in at the end of January.

By Mike Larson

Close... but no cigar. That’s how I’d characterize inflation these days, at least from a policymaker perspective....

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