The US Department of Labor will release the latest PCE data tonight at 9:30, and the market is not expecting positive news.

**U.S. January PCE Inflation Data (Fed’s Preferred Gauge) Due Friday** The U.S. will release its **January Personal Consumption Expenditures (PCE) Price Index**—the Federal Reserve’s go-to inflation measure—on Friday, March 13 (8:30 PM Beijing time). ### Key Market Expectations: - **Headline PCE**: +2.9% year-over-year (matches the prior reading); +0.3% month-over-month (slower than the prior 0.4% gain). - **Core PCE (excluding food/energy)**: +3.1% year-over-year (a slight acceleration, marking the largest increase since April 2024); +0.4% month-over-month (unchanged from the prior month). ### Context & Forward Risks: PCE, compiled by the Bureau of Economic Analysis (BEA), links to several CPI price categories. After the latest CPI report, economists raised forecasts for **February core PCE** (due April 9): most expect a 0.4% month-over-month gain (second straight month), with some bracing for a bigger jump. The CPI-PCE gap stems from **weighting differences**: - **CPI (Bureau of Labor Statistics)**: Heavily weights housing costs (e.g., “primary residence rent” rose just 0.1% in January, the slowest pace in 5 years) and used car prices (down 3 straight months). - **PCE**: Emphasizes specific goods costs. February CPI showed sharp gains in computer software, jewelry, and similar items—factors that hit PCE inflation harder. Forecasters at Barclays, Morgan Stanley, and Bank of America expect February core goods prices to rise **at least 0.8%** (10x the gain in the latest CPI report). ### Additional Concerns: - January *and* February PCE readings may fall short of optimism. - Energy, fertilizer, and other input costs have surged amid U.S.-Iran tensions—*before the latest escalation*. - A critical trend: PCE, long “milder” than CPI, is now showing a sharp warming trend.