Key Fed inflation gauge rose 2.8% annually in February, as expected

We do have the wealth record. Rick has the details for us. All right, here we go. The big moment we’ve all been waiting for. Our February read on personal income and spending and all those inflation numbers on the headline. As Steve pointed out, expecting up 4/10 of a percent comes in it up 3/10 of a percent. Now the revisions aren’t showing yet, but maybe as we go through the rest of the numbers they will. Personal spending up 8 tenths, up 8 tenths. That is a stellar #8. Tenths is the best number going all the way back to January of 23. If we look at real spending up 4/10 of a percent, that is the best level going back to December of last year. And if we look at the deflator month over month up 3/10 as expected. And here we go year over year deflator 2.52 point five, 110th higher than 2.4 which was the lowest level since February 21. This is 110th higher than that, but as expected as expect and it really does break a streak of numbers moving lower. Now let’s look at the PCE core deflator month over month and that is up 3/10. Definitely less than 4/10 of the rearview mirror as expected and my favorite is 2.8 on the PCE core deflator year over year 2.8 as expected, which means it remains at the best levels since March of 21. Okay revisions are coming in now. I’ll hit the ones that are most important on the year over year core I just went over last months. 2.8 now becomes 2.9. So we’re actually lower. But if I was the market right now, Steve Liesman, my guess is, is that these numbers are generally as expected, but we’re not making progress on year over year. So the markets are going to have to fight that out. Steve, want to get your reaction to this. Let’s add to that. Rick, you are the market, Rick, I don’t know if you were the market, you are the market man today. He’s the only market. Look, I’m look, it’s chill on, it’s chill on the inflation numbers. It’s hot on the consumption and the and the spending side as far from what I can tell, I’m just income was 03 but outlays was 08. I mean that’s blowing me away. What did you say Rick, about real spending was up 0.4% that’s inflation adjusted 0.4%. Yes, 0.4% exactly right. All right. Diane right here on TV putting the pressure on you is this is going to this is going to upgrade our our first quarter, first quarter GDP numbers isn’t it what what do you guys can you do it on TV now I’m looking at the do it in your head. So I I so OK I’m I’m doing in my head close to 2 1/2 percent I’m thinking on the first quarter so how’s that for you. But I do think what’s also important to remember Waller pointed this out as well and it’s where everyone had declared victory. And Rick you’re right on the year over years but the three month moving average, the six month moving average on all of these figures has moved up with these numbers as far as I can tell with the revisions as well they’ve moved up. That is the wrong direction on momentum for the Federal Reserve on CPI and with that strong consumption number out there as well that’s going to be this is we are I already have people staking out the sort of pushback for a June cut. Wait, what’s the rush? Wait a little longer. Nine of the 19 participants wanted two or less cuts and it’s only one quarter point move by one person within that meeting. That brings it down to two cuts for the year. I know that’s splitting hair, Steve, but the timing of rate cuts keeps getting moved out. We need to see a lot of improvement in terms of inflation in March before we get to a June cut, but also a big slowdown. I’m shaking my head, Diane, Diane, I’m shaking my head because I don’t think this market needs to see anything from the Fed. The way they’ve been trading, it’s been quite remarkable, right. Well, the market may not. I’m talking about the Fed, the Fed. I’m definitely right, a very significant. I’ll let Rick and you talk about this, but but I I just point out you’ve had a really significant reset reset on Fed expectations down 300 basis points for the year end funds rate of course and stocks have gone, have gone up and hit new highs in that context and I think that’s the context for everything we’re talking about here today.