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The Federal Reserve’s favorite inflation measure picked up in February and may head to a level later in 2025 that will prompt policymakers to keep interest rates on hold, some economists said. That sets up a conflict with President Donald Trump, who’s lobbied for a rate cut.
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Elon Musk urges Tesla staffers to ‘hang onto your stock’ even though it has fallen 50%
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The core PCE index is expected to have risen 2.7% year-on-year and 0.33% month-on-month, according to the consensus estimate on StreetAccount. That compares with gains 2.6% and 0.28%, respectively, in January. The data is due on Friday, along with personal income and spending numbers.
“Balancing out the downside to growth and the upside to inflation, we stick to our forecast that the Fed won’t be able to cut rates any further,” Bank of America (BAC+0.05%) economists wrote in a note dated March 21. The central bank has “no margin for error on its inflation mandate.”
Economic indicators will be generally in focus this week as investors remain concerned about potential economic weakening — which kept stocks wavering between gains and losses last week.
Attention may turn toward the April 2 deadline for Trump’s “reciprocal” tariffs on countries worldwide, and possible fuller implementation of 25% duties on Canada and Mexico.
“There is a wide range of potential outcomes,” the BofA economists wrote. “Risks are skewed toward weaker growth and even higher inflation.”
Here’s what else investors will be watching:
Monday, March 24
The preliminary purchasing manager index (PMI) numbers for March probably showed economic deterioration. The manufacturing reading may have dropped to 52.2 from 52.7, and the services level to 50.1 from 51, according to the StreetAccount survey. A number above 50 indicates expansion.
The ShopTalk Conference starts in Las Vegas and runs through Thursday. It will focus on the future of retail and e-commerce.
Tuesday, March 25
BYD Co. (BYDDY-6.16%) may say sales and profit surged last quarter from a year earlier, according to analysts surveyed by StreetAccount. The Chinese automaker earlier in March unveiled a new EV charging system that can refill the batteries on some of its new models in five minutes, compared with about 15 minutes for Tesla’s (TSLA+3.88%) SuperCharger.
U.S. consumer confidence may have weakened in March to 95.3 from 98.3 and the Richmond Fed index may have dropped to -2 from 6 amid concerns about the economy.
The S&P/Case-Schiller index for January and new home sales numbers for February will probably show continued strength in the real estate market.
Wednesday, March 26
Dollar Tree (DLTR+3.48%) may say its quarterly sales and earnings per share fell from a year earlier, according to the StreetAccount survey.
Economic indicators include durable-goods orders.
Thursday, March 27
Pending home sales may rebound in February, rising 1.5% after a 4.6% decline in January. Other economic indicators include weekly initial jobless claims and the U.S. merchandise trade balance for February.
Corporate earnings include Walgreens (WBA+0.49%) and Lululemon (LULU-0.60%).
Friday, March 28
Economic indicators include the PCE inflation measure, and personal income and spending.
