INCREASING INFLATION

The Fed’s favorite inflation measure, core PCE, came in slightly hot at 0.4% in February, up from 0.3% in January. Y-o-Y inflation was also elevated at 2.8%, up from 2.7% M-o-M. Worse, over the last six months annualized inflation is 3.1%, over the last three months it’s 3.6%! Now, just wait until tariffs begin to kick in over the next three months as existing auto dealer inventory is drawn down.