Fed's preferred inflation gauge shows price increases fell in November
Published On Dec 20, 2024, 8:35 AM
The Fed's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, showed a month-over-month price increase of only 0.1% in November, a decrease from 0.3% in October. This indicates that inflationary pressures are moderating, though they remain above the Fed's 2% target. While the Fed cut interest rates recently, it also indicated less easing in 2025 due to persistent inflation. The overall PCE increased 2.4% year-over-year, slightly above expectations. These findings contribute to ongoing discussions about future monetary policy amid the uncertain economic landscape fueled by political changes and potential policy shifts.
Stock Forecasts
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Despite the moderation in inflation and recent interest rate cuts, the Fed's projection of prolonged inflation pressures casts uncertainty over economic growth. Companies with pricing power may benefit from the continued inflationary environment, while sectors sensitive to interest rates might face headwinds. Investors should consider sectors like consumer staples or utilities, which tend to perform well in inflationary cycles compared to growth stocks that may struggle in a tightening environment.
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