PCE: Fed's preferred inflation gauge meets expectations in December
Published On Jan 31, 2025, 9:09 AM
The latest reading of the core Personal Consumption Expenditures (PCE) index, which is the Federal Reserve's preferred inflation measure, showed a 0.2% increase in December, meeting Wall Street's expectations. The year-over-year increase for the core PCE remained at 2.8%, with the overall PCE rising 2.6% compared to the previous month. The Federal Reserve has paused its interest rate cuts, emphasizing that inflation is above their target and signaling that they are waiting for more data, especially regarding recent tariffs which could impact inflation further.
Stock Forecasts
XLF
Positive
The Fed's pausing of interest rate cuts suggests they are taking a cautious approach as inflation remains a concern. If inflation continues to meet expectations, it could lead to potential tightening of monetary policy in the future, which typically strengthens financial sectors as borrowing costs rise.
Related News
Fed's Powell has had no contact with Trump after president said he'll demand rates drop
Jan 29, 2025, 2:41 PM
Powell said 'it's not appropriate' for the Fed chair to respond to Trump's comments.
Federal Reserve holds interest rates steady amid inflation uncertainty
Jan 29, 2025, 2:00 PM
The Federal Reserve held interest rates steady at its January meeting following three consecutive rate cuts amid uncertainty over inflation and economic conditions.
Higher Interest Rates Make Federal Debt More Expensive
Jan 29, 2025, 1:00 PM
The Fed’s key rate has a bearing on the sustainability of public borrowing, which is heading to striking levels.