Personal Consumption Expenditures (PCE) rose to +6.1% in January, the highest reading in 40 years. Core PCE, the Federal Reserve’s preferred inflation measure which excludes volatile food and energy prices, jumped to a 39-year high of +5.2%. Additionally, Core PCE’s month-over-month increase of +0.51% was the second highest since last May, confirming that inflationary pressures have remained persistent. And with the emergence of the Russia-Ukraine conflict, the persistence of today’s inflation will likely be exacerbated. The collective data should keep the Fed on course to begin tightening policy next month if they are serious about reigning in surging prices.
