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Let us start with the good news because there isn't much of it. The PCE index rose by 5% from the year before, slightly below expectations. Core PCE, the Fed's preferred inflation measure which excludes the volatile categories of food and energy, rose by 4.6%, a tick below January's acceleration to 4.7%.
UBS' global chief economist thinks core PCE inflation will drop to 2.1% this year, calling for a Fed monetary policy pivot as early as July.
The Federal Reserve's preferred measurement of inflation continued to cool off in November, providing yet another welcome indication that this period of painfully high prices has peaked.
Goldman sees supply chain improvements, labor-market rebalancing, and increasing supply in the rental market contributing to lower inflation.
Food and gas prices are still painfully high. But this could be the worst of pandemic-era inflation.