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Falling real US incomes raise doubts about the outlook for spending and inflation
The September personal income and spending report shows that US inflation remains somewhat sticky, with the core personal consumer expenditure deflator coming in at 0.3% month-on-month/3.7% as expected. This follows three months where it has averaged 0.17% MoM, which is exactly what we'd need to see over time to take us back to the 2% year-on-year rate that the Federal Reserve is targeting. As such, it's a little disappointing – but with the Fed acknowledging the recent tightening of financial conditions brought about by the spike in Treasury yields and Fed Chair Jerome Powell’s recent comments that “given the ... (full story)