Inflation information tops the US agenda as we speak

By cutting rates 50 basis points, the Fed has declared something of a victory over inflation but there is still some problematic inflation, particularly around insurance, healthcare and housing. With China stimulating this week, next year might not be as smooth sailing on prices as hoped.

That said, the bond market is still seeing sub-2% inflation so it’s hardly a time to panic.

The PCE report is coming up at the bottom of the hour and expected to show headline prices up 0.1% m/m and core up 0.2% (Waller forecast at +0.14%). Personal income is forecast up 0.4% and spending up 0.3%.

We’re past the days where US inflation reports would lead to +3% moves in equity markets but this data point won’t be ignored. That said, we’re dealing with some quarter-end flows this week so be careful about drawing conclusions.

Along with that report we get advanced goods trade balance and wholesale inventories at the same time. Another highlight comes at 10 am ET with the final UMich report. The Fed’s Bowman speaks again at 1:15 pm ET but otherwise it’s quiet on the Fedspeak agenda.