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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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- The impressive decline in core PCE inflation is particularly evident when comparing with FOMC forecasts.
- The June SEP pencilled in Q4 Y/Y PCE growth of 3.9%, the Sept SEP had 3.7% and then the Dec SEP was lowered sharply to 3.2%.
- With Friday’s December PCE print, core PCE almost pipped below this with an average 3.15% Y/Y in Q4 and finished the quarter at 2.9% Y/Y.
- Nomura write that the gap between realized Q4/Q4 inflation and the Jun’23 SEP median estimate is the largest ever.
- Returning to CPI, one potential factor going against the likelihood of a March rate cut is that it would likely need to be teed up by Chair Powell at the Jan 31 decision.
- That lands a week and a half before annual CPI seasonal adjustment revisions on Feb 9 (in turn before the January CPI report on Feb 13) which could alter recent trends.
- CPI may be a separate indicator that the Fed doesn’t target but it could nevertheless through up surprises. That of course cuts both ways though, with a revelation of a recently softer trend adding weight to the return to target in core PCE over the second half of 2023.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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