Here’s Why You Should Have Stayed In Bed: Inflation Hooray, Bill Dudley Edition

On Friday morning we got some data you probably don’t care about.

Or maybe you do care, but I’d be willing to bet you didn’t roll out of bed this morning and immediately think “oh my God, I just missed the personal income and consumption prints!” On the off chance you got up on the “US econ” side of the bed, here’s what you need to know summarized in handy bullet points:

• U.S. Feb. Personal Income Rose 0.4%; Matches Est.
• Personal consumption rose 0.1%; est. up 0.2%
• Personal consumption forecast range 0% to 0.4% from 75 economists
• Personal income forecast range 0.2% to 0.5% from 74 economists
• Real personal spending fell 0.1%; est. up 0.1%
• Core inflation rose 0.2%; est. up 0.2%; rose 1.8% Y/y
• PCE prices rose 0.1%; est. up 0.1%; rose 2.1% Y/y
• Compensation at 0.4% in Feb. vs 0.4% the prior month
• Savings rate at 5.6% in Feb. vs 5.4% the prior month

See the two bolded numbers? Yeah, so just connect the dots: incomes up (matching consensus), spending barely up (missing consensus). Or, summed up, no animal spirits.

One thing you probably should note is the Fed’s preferred measure of inflation hit its target for the first time in almost five years:

Hooray! That opens the door for a stronger dollar and higher rates and, most importantly, more hawkish rhetoric.

Or not. Because we got this at 9 EST:

• FED’S DUDLEY: NUMBER OF RATE HIKES IN 2017 DEPENDS ON DATA
• FED’S DUDLEY: COUPLE MORE HIKES THIS YEAR SEEMS REASONABLE

Which promptly led to this:

Because this:

• USD/JPY TO FRESH LOW 111.60 AS FED’S DUDLEY IN NO RUSH TO HIKE
• Treasury futures on session highs after Fed’s Dudley said he sees a “couple” more hikes this year and no great urgency to tighten monetary policy.

********

And that’s why you should have just stayed in bed this morning.