Friday, Feb 24, 2023

Yesterday's BTC wobble, what the Base launch means, PCE vs CPI, consumers aren't giving up...

"It's still magic even if you know how it's done." – Terry Pratchett ||

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MARKETS

Inflation hints

Except for a brief crypto asset wobble yesterday (more on this below), markets seem to be holding their breath in anticipation of the PCE data out later today. It is expected to confirm the dawning realization that inflation will be really, really hard to bring down further, and could trigger even more rates expectations adjustments on top of the already brutal ones we have seen so far this month. The market seems emotionally primed for bad news on this front (at least judging by the tone of financial headlines), so any negative surprise could cause some strong reactions.

Given the importance of this figure, it’s worth a quick review of how it differs from the CPI: