US consumer spending slows as core PCE inflation rises to 2.8% in February 2025—Is the Fed forced to delay rate cuts?

US core PCE inflation, the Federal Reserve’s key inflation measure, rose 0.4% in February 2025, pushing the 12-month rate to 2.8%, exceeding expectations. Despite a 0.8% rise in personal income, consumer spending grew just 0.4%, below the forecasted 0.5%. The saving rate also climbed to 4.6%, reflecting growing caution among consumers. Rising goods and services prices, coupled with concerns over President Donald Trump’s tariff policies, add uncertainty to the inflation outlook. With inflation above the Fed’s target...