Summary
The preferred inflation indicator of the Federal Reserve, the PCE price index will be published this morning by the BEA. The index differs from the best -known consumer price index because its composition is changed more frequently and is faster to reflect price fluctuations in real time. In the last report, until December, the inflation of the PCE was 2.6% from one year to the next; In comparison, the latest IPC report until December had 3.0%inflation. Core PCE, which removes volatile food and energy prices, increased at a rate of 2.8% in the last month. Our PCE forecasts require lower readings for January: 2.5% for the title number and 2.7% for basic reading, because persistent inflation in certain services at sticky prices, including transport and housing, remains a challenge for the Fed because it increases towards its 2% target. Overall, inflation in this cycle culminated in the summer of 2022 and has been on a fairly coherent decline since then. We follow 20 inflation measures on a monthly basis. On average, they indicate that prices are increasing at a rate of 3.2% from one year to another, compared to 2.9% a month ago. We note that the numbers are volatile and deformed by fluctuations in the price inflation ratio of volatile producers. By focusing on basic inflation – which we obtain by doing the basic CPI average, ex -finish and energy of the PCE based on the market (from the GDP report), the rate of waiting for inflation over five years, the interest rate for the profitability threshold of TIPS at 10 years and
