#PCEInflationWatch

The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation, rose by 0.3% in December 2024, following a 0.1% increase in November. This brought the annual PCE inflation rate to 2.6%, up from 2.4% the previous month.

The core PCE Price Index, which excludes volatile food and energy prices, increased by 0.2% in December, maintaining an annual rate of 2.8% for the third consecutive month.

In response to these figures, Chicago Federal Reserve President Austan Goolsbee expressed optimism about the progress toward the Fed's 2% inflation target but cautioned about potential inflationary pressures from upcoming tariffs.

The Federal Reserve has opted to pause further interest rate cuts, awaiting more substantial evidence of declining inflation before making additional policy adjustments.