Latest PCE data supports a March 2024 rate cut, with 2% PCE inflation possible in 1Q24

As opposed to inflation lingering at elevated levels, it is increasingly dissipating, with signs growing that the US economy could venture into outright deflation.

Executive summary

• The latest PCE inflation data revealed deepening disinflation, with headline PCE growth MoM negative for the first time since April 2020. Furthermore, MoM core PCE growth was just 0.06%, which is also the lowest rate of growth that has been seen since April 2020.

• All key aggregate PCE measures (headline, core, supercore) are now recordin…