Today's Update 03-28-2025
Key Points and Metrics
Key Points and Metrics:
Economic Indicators
United States
Core PCE Price Index (Year-over-Year)
Actual: 2.8%
Forecast: 2.7%
Previous: 2.7% (Revised from 2.6%)
Core PCE Price Index (Month-over-Month)
Actual: 0.4%
Forecast: 0.3%
Previous: 0.3%
PCE Price Index (Year-over-Year)
Actual: 2.5%
Forecast: 2.5%
Previous: 2.5%
PCE Price Index (Month-over-Month)
Actual: 0.3%
Forecast: 0.3%
Previous: 0.3%
Personal Income (Month-over-Month)
Actual: 0.8%
Forecast: 0.4%
Previous: 0.9%
Consumer Spending (Month-over-Month)
Actual: 0.4%
Forecast: 0.5%
Previous: -0.3% (Revised from -0.2%)
Real Personal Consumption (Month-over-Month)
Actual: 0.1%
Forecast: 0.3%
Previous: -0.6% (Revised from -0.5%)
University of Michigan Consumer Sentiment (Final)
Previous: 57.9
Canada
GDP (Month-over-Month)
Actual: 0.4%
Forecast: 0.3%
Previous: 0.3% (Revised from 0.2%)
February Flash Estimate: Likely flat
Europe
Spanish CPI (Year-over-Year, Flash)
Actual: 2.3%
Forecast: 2.6%
Previous: 3.0%
Spanish HICP (Year-over-Year, Flash)
Actual: 2.2%
Forecast: 2.5%
Previous: 2.9%
German Unemployment Rate
Actual: 6.3%
Forecast: 6.2%
Previous: 6.2%
German Unemployment Change (Seasonally Adjusted)
Actual: +26,000
Forecast: +10,000
Previous: +9,000 (Revised from +5,000)
Market Movements
US Stock Futures: Declined as investors focus on inflation data and trade war impacts.
Gold Prices: Reached a new high, indicating a shift towards safe-haven assets.
S&P 500 Futures: Decreased ahead of inflation data.
Copper Prices: Fell below $10,000 per tonne amid tariff concerns.
Trade and Geopolitical Updates
EU's Response to Tariffs: European Union plans to offer concessions to the US in hopes of reducing reciprocal tariffs impacting exports.
US-China Relations: China emphasizes that mutual respect is essential for cooperation and warns of countermeasures if the US harms China's interests.
US-Canada Trade Talks: Canadian officials are in discussions with the US to mitigate tariff impacts.
Ukraine Minerals Deal: Ongoing discussions about a minerals deal between Ukraine and the US; no finalized draft yet.
ECB Statements: ECB's Vice President de Guindos notes that a trade war would primarily impact economic growth, with any inflation effects being offset over the medium term.
Other Notable Points
Effective Federal Funds Rate: Held steady at 4.33% on March 27th.
Brazil-US Trade Relations: Brazil's Finance Minister Haddad affirms strong trade ties with the US, seeing no reason for a tariff dispute.
Oil and Energy Sector: Reports of continued attacks on energy infrastructure in conflict zones, potentially influencing energy markets.
Market Reactions
US stock futures fell while gold set a new high
Dollar whipsawed before weakening after PCE data
S&P 500 weakened on inflation data and trade concerns
EUR strengthened on news of potential EU concessions to US
Final Thoughts
The higher-than-expected Core PCE inflation reading (the Fed's preferred inflation gauge) complicates the Federal Reserve's path to rate cuts. With Core PCE at 2.8% year-over-year and monthly inflation running hotter than anticipated, markets are recalibrating expectations for the timing and pace of potential rate cuts. Consumer spending came in below expectations despite strong personal income growth, suggesting some consumer caution.
Meanwhile, escalating trade tensions between the US and major trading partners (EU, China) are creating additional economic uncertainty. The EU's preparation of concessions indicates the seriousness with which they view the impending tariffs. These trade frictions, combined with sticky inflation, create a challenging environment for policymakers and investors alike, potentially explaining today's market reactions with falling stock futures, weakening dollar, and gold reaching new highs as investors seek safe havens.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry