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NatWest on Next Week's PCE Deflator

US OUTLOOK/OPINION
  • NatWest economists comment on next week Friday's core PCE deflator read for December, the Fed’s preferred inflation gauge.
  • NatWest expects the "inflation data to continue to signal continued progress towards the Fed’s inflation mandate. We estimate the core PCE deflator ticked up by 0.2% (unrounded 0.168%), which while up from the prior two prints of 0.1% each would still be below the 0.3% core CPI print in December."
  • "If our forecast is realized, the y/y rate will fall from 3.2% to 2.9% and the six-month annual rate of change will hold steady at a 33-month low of 2.7%."

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