Fed’s preferred inflation measure slips closer to yearly target, keeping chance of a March rate cut alive.
26 January 2024
The Federal Reserve’s (Fed) preferred measure of inflation for the month of December 2023 has just been released, and it keeps alive the chances of a rate cut in March. PCE (Personal Consumption Expenditures) as a measure of inflation differs to the wider-known CPI index in that it only measures goods and services consumed by individuals, and that is why the Fed prefers PCE as a broad gauge of inflation when judging policy. Core PCE was forecast to show 0.2% growth over the month and it came out in-line. The yearly PCE core inflation rate is now 2.9% - much closer to the Fed’s target rate of 2% than it has been at any time over the last three years.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.