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US INFLATION: Citi Lowers Core PCE Tracking Estimate Post-CPI

US INFLATION
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Case in point about the debate over how September PCE is shaping up after today's CPI report: in contrast to Nomura (noted earlier raising their core PCE estimate about 0.02pp to 0.28% post-CPI), Citi has lowered theirs, to 0.16% from 0.22%:

  • "Strength in CPI was concentrated in components like apparel prices, which should retrace at some point, and airfares, which will not directly boost core PCE inflation. There could be some strength to medical services prices in September PCE as well but for now we are penciling in a much more benign 0.16%MoM core PCE (to be updated tomorrow after PP). Even a stronger PCE increase would be enough for the Fed to still cut rates by 25bp in November."
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Case in point about the debate over how September PCE is shaping up after today's CPI report: in contrast to Nomura (noted earlier raising their core PCE estimate about 0.02pp to 0.28% post-CPI), Citi has lowered theirs, to 0.16% from 0.22%:

  • "Strength in CPI was concentrated in components like apparel prices, which should retrace at some point, and airfares, which will not directly boost core PCE inflation. There could be some strength to medical services prices in September PCE as well but for now we are penciling in a much more benign 0.16%MoM core PCE (to be updated tomorrow after PP). Even a stronger PCE increase would be enough for the Fed to still cut rates by 25bp in November."