Editor's note: This is a brief excerpt from today's Morning Newsletter which was written by Hedgeye Director of Research Daryl Jones.
The second reason we believe that the Fed will ultimately be more dovish than consensus expects is deflation. As is highlighted in the Chart of the Day, which shows PCE and PCE ex-energy and food going back a decade, inflation is solidly below the Fed’s target of 2%. The charts also shows, of course, that deflation is far from transitory so far with PCE and PCE ex-energy and food tracking very closely.
