Weekly Market Commentary - 5.2.22

ECONOMIC REVIEW1 • The Federal Reserve’s (Fed) preferred inflation measure, Personal Consumption Expenditure (PCE) Price Index, was released last week and confirmed a slight easing in “core” prices seen in the CPI reading earlier this month. o Core PCE registered a 0.3% increase in March, in line with expectations and below the previous month’s reading of 0.4%. The annual rate of core PCE also dropped to 5.2%, below February’s downwardly revised 5.3%, though the headline number still sits at 6.6%, a level not seen since 1982. • The University of Michigan Consumer Sentiment index declined below the April forecasts of 65.7 to 65.2, though current financial conditions were seen more favorably than the first quarter. o While inflation expectations for the year ahead clocked in at a healthy 5.4%, longer-term, 5-year inflation expectations continue to remain anchored at 3.0%. Read Article