Inflation: Did The Fed Move Too Fast?

PCE Inflation data is not easing fast enough, and is starting to go back upward—what this means for the Federal Reserve

Core PCE Inflation

Inflation data was released during the Thanksgiving week. Both the Headline PCE inflation rate and the Core PCE rate increased on an annualized basis–headline inflation was 2.310% up from 2.096% whereas the core rate, the more closely-watched rate moved upward to 2.796% from 2. 678%. The Federal Reserve had been banking on inflation growth easing downward to the 2.00% target rate. The latest increase in the core rate may be halting to the Fed’s next few meetings as they wait and see what happens next with inflation.

This is a bigger look at Core inflation and its rate of growth on an annualized basis. Inflation had surged significantly higher from the break in the supply chain due to COVID. Then, companies raised prices and effectively kept them there as record profits on Wall Street attest. The move higher in the core rate is subtle, but it may be enough to push the Fed to pause for a period of time until more certainty is gained.