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Economists are expecting core PCE inflation — considered to be the Fed’s primary inflation metric — to accelerate to a 0.4% month-over-month change for January in Thursday’s release (Feb. 29), up from 0.2% previously. If correct, the monthly gain would be the strongest in a year. “The stage is set for monthly PCE inflation to jump following hot CPI and PPI reports. While that certainly won’t put the Fed at ease, we think policymakers will largely look through the January increase,” advises Bloomberg Economics. “Temporary factors — including residual seasonality and the increase in prices of portfolio-management services — serve as critical drivers behind the January increase. Similarly, some of the expected gain in personal income comes from cost-of-living adjustments and an unsustainably high nonfarm-payroll print.”