📍 December PCE unexpectedly exceeds forecasts: The story of inflation cooling down faces obstacles

📌 Headline PCE (YoY): +2.9% (higher than +2.8% forecast, same as last month)
📌 Core PCE (YoY): +3.0% (higher than +2.9% forecast, up from +2.8% in November)
📌 Monthly (MoM) figures are also hotter than expected:
- Headline: +0.4% (+0.3% forecast, +0.2% last month)
- Core: +0.4% (+0.3% forecast, +0.2% last month)
-> MoM increase doubles the previous month. Inflation momentum is returning.
📌 Data in the report:
- Personal income: +0.3% MoM
- Nominal spending: +0.4% MoM
- But real spending only +0.1% -> People are spending more money, but mostly due to rising prices.
📌 December cash flow mainly went into services (housing, healthcare, insurance, finance). Goods are weakening again.
-> The service inflation model remains a sticky point,
📌 Compared to Truflation:
- Truflation PCE: ~1.55%
- Core: ~1.92%
-> Huge discrepancy compared to official figures. The market still has to price based on BEA’s official PCE because that’s what the Fed looks at.
Core PCE returning to 3.0% YoY + MoM increase of 0.4% undermines the scenario of the Fed cutting rates early.