Core Personal Consumption Expenditures (PCE) –the Federal Reserve’s preferred inflation measure– edged up slightly to 3.62% from 3.60% for the month prior. With inflation persisting well beyond the Fed’s 2.0% inflation target, some central bank officials have begun to move their rate hike estimates forward in response. Extreme increases in the particularly sticky shelter components of inflation (housing prices and rent costs) increase the probability that inflation could likely be more persistent than the Fed expected in the months to come.
