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PCE Price Index Rises 0.6%, Fed Notes Risk of Further Rate Hikes


The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred gauge of inflation, rose 0.6% in January from the month prior, and 5.4% from the same month last year.[0] Excluding volatile food and energy components, core prices increased by 0.6% for the month and 4.7% from the previous year.[1] Additionally, January’s personal spending increased 1.1%, its biggest advance since March 2021.[2]

The minutes from the Fed’s January 31 and February 1 meeting showed that while there were signs of inflation easing, central bank officials were still concerned about rising prices.[3] Investors sought safety on Thursday after it was noted that further interest rate hikes are likely, causing yields to drop.[4]

Data released on Friday showed that personal income rose 1.2% in January, while consumer spending increased 1.4%.[5] The University of Michigan consumer sentiment index came in at 66.4, unchanged from the mid-month flash reading.[6]

Oil prices rose 0.9%, supported by prospects of reduced supply from Russia, but a weekly build in US crude stockpiles limited the upside potential.[6]

Meanwhile, the stock market saw declines on Friday, with the Nasdaq Composite (COMP.IND) finishing 0.1% lower, the S&P 500 (SP500) ending down 0.2%, and the Dow (DJI) closing 0.3% lower.[5] The 10-year U.S. Treasury yield ticked lower to 3.87% Thursday, falling for a second-straight session, but moved higher to 3.94% Friday morning.[7]

Shares of Dow component Boeing Co. (BA) fell 4.5% as the airplane maker halted deliveries of the 787 Dreamliner.[8] The Federal Aviation Administration said deliveries were temporarily halted as Boeing is conducting additional analysis on a fuselage component.[8]

Cleveland Fed President Loretta Mester said a bigger-than-expected rise in the central bank’s preferred inflation gauge shows the need to keep raising rates.[0] On Wednesday, James Bullard, President of the Federal Reserve Bank of St. Louis, who is not part of the FOMC voting committee this year but is a prominent hawk, suggested that the Fed’s target rate might need to be increased from the current 4.5% – 4.75% to between 5.25% and 5.5%.[9]

0. “Tech Crushed as Bond Yields Climb on Hot Inflation: Markets Wrap” Yahoo! Voices, 24 Feb. 2023,

1. “Stock market news today: Stocks slide after hotter-than-expected key inflation print” Yahoo News, 24 Feb. 2023,

2. “Markets Today: Stock Indexes Fall as PCE Inflation Accelerates” Barchart, 24 Feb. 2023,

3. “S&P 500, Dow slide again after another hawkish signal from Fed; Nasdaq posts gain” Seeking Alpha, 22 Feb. 2023,

4. “Treasury yields dip as investors assess Fed policy outlook” CNBC, 23 Feb. 2023,

5. “Stock Market News Today: Stocks in the Red after Hot Inflation Report” TipRanks, 24 Feb. 2023,

6. “PCE Inflation Outlook Fuels Premarket Losses for US Equity Futures” msnNOW, 24 Feb. 2023,

7. “Dow Jones Dives 400 Points On Hot Inflation Report; Tesla Stock Skids” Investor’s Business Daily, 24 Feb. 2023,

8. “Dow falls more than 300 points after Fed’s favorite inflation gauge runs hotter than expected” MarketWatch, 24 Feb. 2023,

9. “So Long, Losing Streak? Stocks, Yields Climb as Market Mulls Fed Minutes, Hot Jobs Data, GDP – Ticker Tape” The Ticker Tape, 23 Feb. 2023,

Forecast Future Price Action
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