HEALTHCARE: Healthcare: Week in Review

• Core CPI surprisingly eased to 3.12% Y/Y in February (cons 3.2) from what had been a surprisingly strong 3.26% in January.
• Within the seasonally adjusted data, both three- and six-month run rates are still running hotter though, at 3.6% annualized.
• Supercore (core services ex-housing) inflation pulled back more than expected on the month although as noted above it was dragged lower by softer than expected airfares and vehicle insurance (for which PPI and not CPI feeds into PCE).
• Supercore run rates are still robust despite easing in the latest month, at 4.8% annualized over three months and 4.5% over six months, but there has been a large wedge with PCE supercore which stood at 3.3% annualized over six months back in January. 

Core CPI (SA)

• % M/M: 0.227 in Feb'25 after 0.446 in Jan'25
• % 3mth ar: 3.6 in Feb'25 after 3.9 in Jan'25
• % 6mth ar: 3.6 in Feb'25 after 3.7 in Jan'25

CPI Core Services Non-Housing (SA)

• % M/M: 0.215 in Feb'25 after 0.757 in Jan'25
• % 3mth ar: 4.8 in Feb'25 after 5.4 in Jan'25
• % 6mth ar: 4.5 in Feb'25 after 4.7 in Jan'25

Initial dovish market reaction to the CPI data fades with feedthrough to the Fed’s preferred PCE reading seemingly less dovish than the headline readings.

• Fed Funds essentially unchanged vs. pre-data levels as a result, showing 1bp of easing for March, 9.5bp through May, 25.5bp through June and 71.5bp through December.
• 79bp of cuts were briefly priced through December following the data.

Having been sold on the CPI headlines, the dollar is recouping the losses and then some - putting EUR/USD now at fresh daily lows, having traded a daily high in the snap CPI reaction.

• Move mimics that seen in stocks and, in particular, bond markets - as Treasuries trade to new daily lows having erased the ~15 tick CPI spike.
• Details of the inflation print still being pored over and in particular the feedthrough to PCE, which could define the broader reaction here.