US PCE Inflation - 2024-12-19

Markets don't seem to be in the mood for good news. But we just got some. PCE, the inflation measure the Fed actually targets, came in below consensus and shows deceleration across the board, with 1-month measures weaker than 3-month measures weaker than 12-month measures. Maybe the Fed didn't need to panic. And by the way, this shows how approximate our statistical data is -- when CPI and PCE, driven by the same underlying data, tell such different stories just because of their differing weighting schemes.