It’s a holiday week in the US, but the schedule’s pretty full and includes an update on the Fed’s preferred inflation gauge, which’ll garner whatever limited attention it’s possible to command considering it’ll be released on Good Friday.

The story’s exhaustingly familiar by now: The “median” Fed official’s still inclined to cut rates three times in 2024, and some critics think that’s incongruous with inflation realities, which suggest underlying price growth may well settle above 2%. Some argue the Fed’s actually fine with that or even that the Committee de facto adopted a higher target in the interest of i) inflating away America’s debt, ii) ensuring the economy runs hot ahead of the election or iii) both.

As noted in the new Weekly, equities no longer care all that much about how many times the Fed cuts this year or when, just as long as it’s clear the trajectory of policy rates from here’s lower not higher. And that much is indeed clear after last week.

Economists expect 0.3% from the MoM core PCE reading due March 29. That’s too warm as it is. Any upside to consensus would be decidedly unwelcome, if not entirely surprising given the PPI overshoot.

Anyone around on Good Friday to parse the release will eye the “supercore” measures for additional evidence of “sticky” services prices.

“In a more typical environment, we’d emphasize the release of February’s core-PCE numbers, but there are a couple factors suggesting the data won’t be the market mover it has historically been,” BMO’s Ian Lyngen and Vail Hartman wrote. “First, it is released when the bond market is closed, implying the first opportunity to trade it will be the following Monday, a long time for investors to ponder how much it really matters [and] second, the combination of CPI and PPI has given forecasters (and the Fed) confidence in the +0.3% consensus and Powell has already told us inflation’s trajectory in January and February is still consistent with 75bps of rate cuts.”

That latter point’s important: Powell, during last week’s press conference, said that although he’s cognizant of the peril inherent in writing off data the Fed doesn’t like as anomalous and thereby not worth fretting over, he nevertheless made it clear that at least from his perspective, the disinflation story’s intact despite overshoots in January and February. So, there’s a very real sense in which Powell, inadvertently or not, preemptively declared Friday’s PCE release a non-event.

Stocks are, of course, coming off their best week of 2024 and are perched near records. The rally’s inexorable. In his latest, Goldman’s David Kostin declined to raise his year-end S&P target for a third time, but sketched a scenario in which the benchmark runs to 6,000 by year-end. Last week, SocGen’s Manish Kabra dethroned BofA’s Savita Subramanian as the most bullish strategist on the Street — Kabra’s year-end target is now 5,500.

As the simple figure below shows, it’s not just US shares. Stocks are buoyant around the world.

At the risk of coming across as unduly abrasive towards the motley collection of affable contrarians and beloved bears popular among legions of market participants old and young, it’s been 15 years since Lehman and every time stocks have swooned, policymakers stepped in. At what point do lamentations for the death of price discovery and derisive jokes about the “Fed put” become asinine and unfunny in the context of missed rallies? Not everyone understands that such commentary is for entertainment purposes only. God only knows how much money everyday people have forgone since the GFC by mistaking entertainment for serious analysis.

I digress. Coming quickly back to the PCE release, a 0.3% print on the core gauge would find the YoY pace stalling at 2.8%. As noted here on any number of occasions, the month-to-month readings have to cool. They have to. If not, disinflation on the 12-month readings against which the Fed measures progress will stop and, eventually, reverse.

The fact that 2.8% is a mere 0.2% above the year-end median in the new SEP isn’t exactly comforting: It means the Fed doesn’t see any real disinflation progress for the remainder of 2024, a period over which they intend to cut rates three times. Small wonder critics find the Fed such an easy target.

Also on deck in the holiday-shortened US week: New home sales, updates on both national home price gauges, Conference Board confidence, pending home sales and a “healthy” dose of Fed speak.