PCE Data On Deck, Market Rally or Rate Jitters Ahead?

Monday,24 March 2025, 15:45

U.S S&P Global Manufacturing PMI (Mar)

The latest US S&P Global Manufacturing PMI for February 2025 rose to 52.7, the highest since June 2022, reflecting manufacturing expansion driven by a surge in new orders and output. The data was largely due to manufacturers preemptively increasing purchases in anticipation of tariffs under the new administration, alongside improved demand conditions. However, this growth came with rising input costs and output charge inflation, suggesting potential short-term pressures rather than sustained recovery, as noted in reports from CNBC and S&P Global. For the upcoming March 2025 release, a slight decline is expected to around 51.5-52.0, as the tariff-driven boost may fade with policy clarity or normalization, though the PMI should remain above 50, indicating continued expansion unless disrupted by significant external factors.

Wednesday, 26 March 2025, 14:30

U.S Durable Goods Orders (MoM) (Feb)

The latest U.S. Durable Goods Orders data for January 2025 showed a 3.1% month-over-month increase, rebounding from Decembers 1.8% decline. The figure was driven primarily by a near doubling of non-defense aircraft orders after strike-related disruptions eased, though ex-transportation orders remained flat amid weakening consumer spending and tariff uncertainties. For the upcoming release, market expecting a modest decline or stagnation due to normalizing aircraft orders, rising tariff costs, softening consumer and business sentiment, and cooling labor, despite minor support from sectors like health care equipment.

Thursday, 27 March 2025, 14:30

US GDP (QoQ) (Q4)

The U.S. GDP for Q4 2024 grew at an annualized rate of 2.3% QoQ according to the BEA‘s second estimate released on February 27, 2025. This marked a slowdown from Q3’s 3.1% growth and was driven by consumer and government spending while being tempered by declining investment and trade (both imports and exports fell 0.8%). The full-year growth reached 2.8% despite high interest rates though tariff concerns and a February consumer confidence dip to 98.3, hint at challenges ahead. For Q1 2025, a slowdown is expected given the Atlanta Fed‘s -1.8% GDPNow estimate as of March 18, 2025, reflecting slowing consumer spending, trade uncertainty from Trump’s proposed 25% tariffs on Mexico.

Friday, 28 March 2025, 14:30

U.S Core PCE Price Index (YoY) (Feb)

The latest U.S. Core PCE Price Index (YoY) for January 2025, showed a decline to 2.6% from 2.9% in December 2024, aligning with market expectations. This moderation was driven by a slowdown in consumer spending amid harsh winter weather and front-loaded imports to avoid anticipated tariffs, though persistent shelter costs kept inflation above the Feds 2% target, as reported by outlets like Reuters and Bloomberg. Looking ahead to the February 2025 release, a potential uptick to 2.7%–2.8% is expected by the market, reflecting ongoing shelter pressures and tariff effects, tempered by weaker spending and lower airfares. The Federal Reserve, having likely held rates steady at its March 19–20 meeting may delay cuts until mid-2025, balancing inflation above 2% with economic softening, as projected by Reuters and Morningstar.