INVISIBLE INFLATION

While the Fed frets about inflation being above its 2% target, they need to get over themselves. November core PCE, the Fed’s preferred inflation measure, came in at 2.79% Y-o-Y, admittedly high. But over the past six months the annualized inflation rate has been 2.61%, and for the past three months it’s just 2.25%. In November the M-o-M rate was just 0.16% or 1.94% annualized. Inflation is on the backfoot.