Overview
- Annual PCE inflation reached 2.9% in December and core rose to 3.0%, topping forecasts and edging higher from November’s 2.8% readings.
- The Bureau of Economic Analysis reported 0.4% month-over-month gains for both headline and core measures.
- Traders left rate expectations largely intact, still pricing about 58 basis points of cuts by year-end with the first reduction seen in June at the earliest.
- Economists said the report underscores the challenge of returning to the Fed’s 2% goal, with Jason Furman calling the core outcome a strong finish in the wrong direction.
- The release, delayed by a government shutdown, kept attention on Treasury yields, the dollar, and crypto markets, where positioning was defensive before the data.