The 0.27% m/m rise in the core PCE deflator in October was a little lower than we feared based on the earlier CPI and PPI data, but still confirms that prices rose at an above-target rate for the second month running and means the annual core PCE inflation rate edged up to 2.8% and the three-month annualised rate also jumped to 2.8%. With the minutes of the Fed’s early November meeting suggesting that some participants could support a pause if inflation remains elevated, the next set of CPI and PPI price data will be pivotal for the Fed’s decision next month.
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