U.S. inflation stays stubborn as traders continue to bet on a July rate cut

On 28 March, data showed that the Federal Reserve's preferred inflation gauge continued to rise at a stubborn pace in February, while a weaker-than-expected monthly rate of personal spending signalled weaker-than-expected household demand, suggesting that consumers are becoming more cautious amid growing concerns about their finances. Stock futures fell further after the data was released, and Treasury yields stayed low. Swap traders continue to expect two 25 basis point rate cuts this year, with the first expected in July.

Today's report suggests that inflation is stubbornly stubborn and Trump's planned tariffs have the potential to further exacerbate price pressures. His aggressive trade policies have already dented business and consumer confidence, and coupled with signs of growing pressure on household finances, have sparked fears that the economy could slip into stagflation or even recession. (Golden Ten)