The Quiet Setup: PCE Inflation and the Fed’s Game of Smoke and Mirrors This Friday, the Bureau of Economic Analysis will release the December PCE Price Index — the “core” inflation metric that Jerome Powell and his central bank cronies claim to trust most. Markets are nervous. And for good reason. Economists and trading desks are whispering about a potential upside surprise — code for: “inflation isn’t going away, and that messes up all the dovish fairy tales Wall Street’s been selling.” The real problem? If the PCE comes in hotter than expected, it won’t just cause a temporary market dip. It’ll signal to the Fed that they have political cover to delay rate cuts, tighten monetary conditions, and accelerate…
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