Decent income and spending, with more inflation pressures

It's a big data day for the markets, and we just got our first batch: February personal income and spending. Both came in hotter than expected, with 0.6% gains vs. forecasts for 0.3% gains. Good news? Sure looks like it.

Here's the catch -- those inflation pressures the Fed keeps pretending don't exist are building. The core Personal Consumption Expenditures (PCE) index climbed 0.3% in February, above expectations for a 0.2% gain. That's also the biggest monthly rise since August. The market-based core PCE, which excludes certain types of hard to figure price changes, jumped 0.4%, twice the gain in January. Core inflation is now up 2.4% year-over-year, the fastest rate of inflation since September.

Bonds are roughly flat after the number, apparently because it was bad but not absolutely awful. But the trend remains the same -- inflation is NOT abating.