Inflation Ticks Up in February, Reducing Odds of Near-Term Fed Rate Cut

• Annual PCE inflation rose in February for the first time since September, signaling the Fed may remain cautious about cutting interest rates soon

• Core PCE inflation, closely tracked by the Fed, also ticked up on a monthly basis after falling late last year

• Household spending jumped by more than expected in February, which could keep inflation elevated for longer

• Fed Chair Powell said policymakers won't "overreact" to a couple months of higher inflation readings and still expect a gradual decline

• The pickup in inflation reduces the odds of the Fed starting to cut rates as early as June, with July now more likely the earliest