Bloomberg Intelligence PCE Inflation Picks Up Ahead of Tariffs
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Mar 28, 2025 Nathan Dean, a Senior Policy Analyst at Bloomberg Intelligence, dives into the complexities of tariffs and their looming impact on the economy. He discusses how recent PCE data indicates weaker consumer spending, a worrying sign for inflation. Dean highlights a shift in consumer behavior, particularly a notable reduction in spending on services. Additionally, he touches on political dynamics in Congress regarding budget resolutions, offering insights into how these factors interplay with economic challenges facing Americans.
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Economic Data and Inflation
- Consumer spending weakened in February, while a key inflation metric picked up.
- This presents a challenge for the economy before the full impact of tariffs.
Consumer Sentiment and Behavior
- The University of Michigan consumer sentiment report provides context but isn't a reliable predictor of future spending.
- It reflects current feelings, but consumer behavior doesn't always align with sentiment.
Long-Term Inflation Expectations
- Consumers expect long-term inflation to rise, reaching its highest level since 1993.
- This concerns the Fed, as it suggests inflation expectations might become unanchored.