New inflation reading has strengthened the slow strategy of the Federal Reserve
The new reading of the Fed's preferred inflation table shows that the price is still sticky in the last month of 2024. This is a new data point that may strengthen the current waiting method interest rate.
The “core” personal consumption expenditure (PCE) index that deprives food and energy costs increased by 2.8 % over the previous year of December last year, staying at the same year in the same year in November.
In a month, the “Core” PCE rose 0.2 %, faster than 0.1 % in November. The annual and monthly numbers are consistent with the expectations of Wall Street.
Inflation did not make the new signs of inflation after deciding the shelter rate this week, which did not increase or decrease dramatic actions. This was the first time after the end of 2024 after three consecutive cuts.
The suspension is a new and cautious part of the Central Bank because it has always paid attention to inflation, and another few unknown about the economic policy of the New Trump administration.
Many Federal Reserve officials have made it clear that they are more and more concerned about signs of continuous inflation, and this may be affected by potential tariffs, immigrants' deportation and tax cuts. In December, officials reduced the number of times this year's estimates from four to 2.
Michelle Bowman, Governor of the Federal Reserve Governor, said in a new speech held in New Hampshire on Friday that before the release of new inflation numbers, she hopes to see a decrease before “further adjustment of the target scope”. Progress of inflation.
“As we entered the new stage when we entered the new stage when we entered a new stage when we entered a new stage in the process of transferring federal capital interest rates to a more neutral policy position.
Although Bowman did say that she thought that inflation would begin to decline again, and by the end of the year, it would be lower than the current situation.
She added that progress may be “bumps and imbalances”, and the upcoming inflation data in the first quarter will show how fast the speed of progress will be. She emphasized that she continued to see a greater risk of inflation, especially at the same time that the market was almost completely employed.
Some analysts believe that the Federal Reserve is completing a year of reduction.
In a research report on Thursday, the US Bank of America said: “We are satisfied with our appeal to the end of the cutting cycle.”
The Fed Chairman Jerome Powell predicts that PCE inflation data is expected to be expected to be seen by the Federal Reserve before this week's PCE inflation data. And the central bank will make things slow.