Core PCE inflation March 2025

On the radar today Wednesday 30th April 2025, the Federal Reserve’s favorite inflation readings. Q1 core PCE, headline PCE for March and core PCE for the same month are expected to be on the wire.
Economists expect an uptick in Core PCE inflation for the first quarter, rising from 2.6% in Q4 of 2024.This projection is largely driven by the year’s early data, with core PCE rising 0.4% in February and 0.3% in January. Headline PCE is projected to be flat at 0.0% in March, down from a 0.3% increase in February. 
The U.S core PCE is considered the federal reserves preferred measure of inflation largely as it excludes food and energy prices and amongst other factors. Economists anticipate a 0.1% month over month increase for the month of March, down from a 0.4% in February and a year-over-year rate of 2.6%, down from 2.8%. Meanwhile, there is uncertainty around the estimates as always. On the other hand, overall annual inflation consumer price index (CPI) witnessed a significant decline this month. Down from 2.8% to 2.4%, well still a little above the Fed’s 2% target.
This week is loaded with U.S. macroeconomic reports, which could hint Fed watchers and policymakers a fresh round of key data to assess how the economy is holding up in the early phase of Trump’s second term and what that could mean for future policy direction.
Talking about policy direction, the next policy decision is slated for May 7th, with market pricing in a 92.4% for rate unchanged whilst 7.6% priced in for a 25bps cut.

TRUMP 2.0 100th DAYS IN OFFICE AND MACRO DATA THIS WEEK
 

Coincidentally, today marks Trump’s 100th days in office and the wave of lagging macro-economic data points releases this week is crucial in gauging the last 100 days in office. Just as markets digest a rocky start to Trump 2.0. From renewed trade war tension, which led to financial market jitters, to immigration and social policies and the trump's clash for federal reserve’s independence.
These economic indicators may offer a clearer picture of whether the turbulence witnessed is a temporary adjustment or the start of a more volatile phase and hence guide policymakers in decision making.

A SNEAK PEAK ON DXY INDEX: IMPACT OF CORE PCE INFLATION OF USD AS PER ANALYST 

Consequentially, today’s data point is somewhat significant as it offers market participants insights into Q1 performance while also serving as potential compass for future policy and market direction.
Looking at the U.S. Dollar index (DXY) which tracks the greenback against a basket of six other major currencies, from technical standpoint, the broader trend remains bearish on the higher time frame. The index has surrendered all gains made since late September 2024.
On April 21, DXY created a three-year low at 97.92, and since then, it has struggled to rebound amid rising uncertainty around Trump 2.0’s economic agenda. Technically, the index has been consolidating between 99.91 and 98.85 since Tuesday, April 22, while awaiting a fresh catalyst to drive direction.

Would today’s readings, tomorrow’s PMI figures, Friday’s job report or perhaps any other fundamentals be the spark that breaks this level?
With volatility lurking, focus is shifted on the radar to find out.