The U.S. core Personal Consumption Expenditures (PCE) price index, which excludes food and energy costs, increased by 0.2% in December 2024, according to data from the Bureau of Economic Analysis.
This marks a slight uptick from the 0.1% rise in November, which had been the lowest in six months. The increase aligned with market expectations, indicating steady underlying inflation pressures.
On an annual basis, core PCE inflation remained at 2.8% for the second consecutive month, well above the Federal Reserve’s 2% target. The persistence of elevated inflation reinforces the Fed’s cautious stance on monetary policy, as policymakers weigh future rate adjustments while monitoring inflationary trends.
The December data suggests that inflationary pressures remain moderate but stubbornly above the Fed’s preferred range. While the slight monthly uptick does not indicate a significant resurgence in inflation, the steady 2.8% annual rate could influence the Fed’s decision-making in the coming months, particularly regarding the timing and extent of potential interest rate cuts in 2025.
Source: Bureau of Economic Analysis
The dollar index slipped below 97 as markets awaited delayed January jobs data, with weak retail sales and reports of China urging banks to cut US Treasury exposure adding pressure on the currency.
The dollar index stayed under pressure on Tuesday as fears of softer foreign demand for US assets, reports of Chinese banks cutting Treasury holdings, expectations of delayed US jobs and inflation data, and a firmer yen on intervention talk weighed on the greenback.
Precious Metals Rebound (09-13 February)Global markets began the week with the US dollar under pressure, falling under 97.5 for a second consecutive session. The greenback’s decline was fueled by a combination of improved risk sentiment and expectations of stable Federal Reserve policy with potential rate cuts on the horizon. Investors remained cautious as they awaited a backlog of delayed US economic data, including employment and inflation figures.
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