Morgan Stanley with the note.
Core inflation moves sideways in December, at 0.28%M (vs 0.28%M prior, and 0.2%M consensus). A reading in line with our forecast confirms the gradual deceleration that started in 2Q23, and implies an increase of 0.25%M for core PCE vs 0.06%M in October. Energy rebounds boosting headline– we expect 0.29%M in December (headline CPI NSA index: 306.593).
Note, however, that the upcoming annual CPI revision might change the overall picture so far. Last year, 2022 inflation prints were revised up, showing much weaker disinflation in the last quarter of the year. This year revision will be released on Friday, February 9.
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