FXStreet (Delhi) – Research Team at Nomura, notes that the both headline and core CPI of US were modestly stronger than our expectations in October, due to an acceleration in prices for medical care services. Key Quotes “However, because of methodological differences between the CPI and PCE price indexes, we do not think that the strength in medical care prices in the CPI will show up in the PCE. Rather, we think that incoming data on inflation imply a 0.104% increase m-o-m in the core PCE index in October, which is about half of the core CPI inflation of 0.202%. Our forecast for core PCE inflation would keep the y-o-y growth in core PCE at 1.3%.” “The gap in the y-o-y core inflation between CPI and PCE will likely remain as wide as six-tenths of a percent. This suggests a gradual pace of rate hikes by the Fed, as the FOMC is expected to tie subsequent rate hikes after liftoff in December to realized core PCE inflation.” For more information, read our latest forex news.