This is, unfortunately, reflected in inflation data. The Federal Reserve’s preferred inflation index of personal consumption expenditure (PCE) ex-food and energy (known as core PCE) for Q1 increased by 4.9%, more than the consensus estimate of 4.7% and than Q4’s 4.4%. The more granular core PCE reading for March, released on Friday, did not show a startling increase, but nor did it decline, coming in at a steady 0.3%, or 4.6% on a year-on-year basis. Again, frustrating resilience after almost five percentage points of interest rate hikes in 12 months.
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