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Hotter Core PCE Trajectory Narrows Gap With Core CPI

US DATA
  • The core PCE deflator being revised up from 3.90% to 4.35% annualized in Q4 leaves a hotter than previously thought trajectory ahead of tomorrow’s January data with current consensus of 0.4% M/M (avg 0.43%) after what is likely to be a revised 0.30% in Dec.
  • It also narrows the annualized gap with core CPI further to 0.8pp, the smallest it’s been since 3Q21, having seen far less of a moderation in inflationary pressure at the end of 2022.

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