Personal Consumption Expenditures (PCE) rose to 5.7% in November, the highest reading in nearly 40 years. Core PCE, the Fed’s preferred inflation measure which excludes volatile food and energy prices, also came in higher at 4.7% and now stands at nearly a 33-year high. Today’s surging inflation continues to broaden out across the economy and is far above the Fed’s 2.0% target rate. We see any inflation surprises in the near term to be to the upside, and persistent inflation will likely keep the Fed on track to begin raising interest rates in 2022.
