"US December PCE Core Inflation Slightly Below Expectations at 2.9% Y/Y"
US December PCE core inflation came in at 2.9% y/y, slightly below the expected 3.0%, with PCE core m/m meeting expectations at +0.2%. Personal income rose 0.3% while personal spending increased by 0.7%, leading to real personal spending rising by 0.5%. The soft headline inflation number in yesterday's GDP data led to speculation about a downside miss on December headline PCE, but it was the core where there was a slight miss. Treasury yields have ticked up slightly in the aftermath, and both three-month and six-month annualized core and headline PCE are now below the Fed target.