Macquarie Bank analysts say that we should prepare for the end of low inflation in the US

Macquarie Bank analysts say that we should prepare for the end of low inflation in the US. Several measures of inflation are picking up, supporting our view that the output gap is smaller than widely believed. PCE price inflation could rise close to 2% by year-end as services inflation is already at a 2.5% pace and the drag from goods inflation should abate. Macquarie says this may present a communication challenge for the Fed and could trigger a period of market volatility before year end.