With PCE inflation data, we have the key price index for October. Core PCE inflation is in line with market expectations (Bloomberg). The imminent forecast for November inflation has dropped significantly.
figure 1: Quarter-on-quarter annualized CPI inflation (blue) and PCE price inflation (red). The light square is the Cleveland Fed’s nowcast as of November 24. Source: BLS, BEA through FRED, Cleveland Federal Reserve, And NBER.
Core inflation also looks like it will fall.
figure 2: Quarter-on-quarter annualized core CPI inflation (blue) and core PCE price inflation (red). The light square is the Cleveland Fed’s nowcast as of November 24. Source: BLS, BEA through FRED, Cleveland Federal Reserve, And NBER.
Please note that these are monthly inflation rates; even if these nowcasts prove to be correct, in the November data, the year-on-year interest rate will continue to rise.
