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MNI BRIEF: NY Fed MCT Inflation Measure Continues To Ease


The Federal Reserve's inflation fight is moving in the right direction as one measure of underlying trend price pressures decreased again for the eighth consecutive month, suggesting the central bank has less need for additional interest rate hikes.

The August Multivariate Core Trend (MCT) reading stood at 2.5%, down from July’s downwardly revised 2.53%, which had initially been reported at 2.76% a month ago. That compares with a PCE price index year-over-year reading of 3.5% in August, and core PCE reading of 3.9%. The Fed’s inflation target is 2%.

(See MNI POLICY: Softer Trend Inflation Boosts Case For Fed Pause)

"Housing accounted for 0.39 percentage point of the increase in the MCT estimate relative to its pre-pandemic average, while services ex-housing accounted for 0.34 ppt. Core goods had a slightly negative contribution of -0.04ppt," New York Fed economists wrote.

Source: New York Fed

MNI Washington Bureau | +1 202-371-2121 |
MNI Washington Bureau | +1 202-371-2121 |

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