Authored by Simon White, Bloomberg macro strategist,

Short-term interest traders appear to agree inflation in the US is becoming entrenched, with net short positioning in SOFR futures picking up the pace.

December PCE price-index data came out today. The outcome should be no surprise after Thursday’s in line PCE data that came with fourth-quarter GDP. Still, with core PCE at 2.8% and headline at 2.6% year-on-year, these numbers are still comfortably above the Fed’s target, and have been for a while.