Some of this is the “January effect” which sees prices for many goods and services rise at the start of the year, notably for healthcare. The bull run on Wall Street will also play a part by pushing up the cost of portfolio management.
Indeed, the core services ex-housing PCE measure, which Fed members like to reference, could well rise 0.6% m/m for the biggest gain since December 2021.
The six-month annualised pace could thus climb to around 2.5%, after two months of running just below 2%, which is a major reason the market has pushed out the expected timing of the first Fed rate cut to June from May.
There are at least 10 Fed speakers out this week, including the influential New York Fed chief John Williams, while Chair Powell gives his Senate testimony on March 7.
The headline CPI for the European Union on Friday is seen slowing to 2.5% from 2.8%, with the core at 2.9% versus 3.3%. That will almost certainly lead the ECB to lower its inflation forecasts at its March meeting, although the market sees almost no chance of a rate cut then. Futures probability is around one-in-three for an April easing, and almost fully priced for June.