A Commerce Department report showed the personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, climbed 0.3% in January month-on-month, as expected. Prices rose 2.4% on a yearly basis, also matching estimates. Meanwhile, initial jobless claims for the week ended Feb. 24 stood at 215,000, greater than expectations of 210,000, according to economists polled by Reuters.
"(The data) should buoy investors' optimism that the economy is on strong footing ... the Fed has done a very substantial job in controlling inflation and if we are not currently enjoying a soft landing, it is soon to come," said Peter Andersen, founder of Andersen Capital Management in Boston. Reports on consumer and producer prices earlier in February, which signaled sticky inflation as well as a guarded approach from Fed policymakers, had led investors to push back expectations of rate cuts to June. At the beginning of this year, traders were betting on March as the starting point for the Fed's easing cycle.
Source: Reuters