Fed Faces High Inflation Hurdle as Incomes and Spending Stay Strong

The Fed's preferred core PCE price index likely remained high in February, showing why the Fed is cautious about cutting rates too soon.

The PCE report may show stronger consumer spending growth in February and another solid gain in personal income.

The report could suggest inflationary pressures were not yet settling back to the Fed's 2% target at the end of 2023.

Fed Chair Powell emphasized a gradual, bumpy path to getting inflation back to target after the latest rate decision.

The retail sales rebound and strong jobs growth in February suggest the personal income and spending report could also be robust.