Core PCE rose 1.1% from a year earlier in November, unchanged from October’s rate but below the consensus Wall Street forecast of a tick up to 1.2%.

Core PCE is known as the Federal Reserve’s favourite measure of inflation. There are signs that inflationary pressures may be starting to build across the economy, but as of yet, these pressures have not been manifested in actual inflation data.

“Investors have been bidding up money market yields since the Fed started tapering, and conversations with hedge fund investors suggest that many of them expect the market to challenge the Fed’s forward guidance,” said Steven Englander, global head of G10 FX strategy at Citi, in a note prior to the release. “So today a 1.1% y/y on the core PCE deflator would push the air out of the ‘tapering is a prelude to tightening’ balloon, while a 1.3% y/y would be a rallying cry to the ‘Fed is behind the curve crowd’.”

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