Daniel Dimartino Booth, CEO and chief strategist of QE Research, reacted to the Federal Reserve, which leaves unchanged interest rates on ‘earning money’.
Federal Reserve Favorite inflation gauge The expected prices increased in December, and it remains above the target level of the central bank amidst ongoing efforts to reduce inflation.
The Department of Commerce said on Friday that Individual consumption expenditure The index was 0.3% from the pre -month and 2.6% on an annual basis. Those figures were in line with the estimates of the economists voted by LSEG.
The core PCE, which excludes unstable food and energy prices, increased 0.2% for the month and increased by 2.8% from a year ago to suit estimates.
Federal Reserve Policy Manufacturers are focusing on PCE headline figure as they try to slow down their target speed of 2%, although they see core data as a better indicator of inflation. The headline PCE ticks up to 2.6% at an annual rate of 2.4% in November last month, while the core PCE has been at 2.8% for three consecutive months.
Federal Reserve inflation stabilizes interest rates amid uncertainty
The headline PCE showed that prices for goods were flat in December, while the prices of services increased by 3.8% a year ago. Food prices were 1.6% last month compared to a year ago, while energy prices during that period were 1.1% lower.
Wages and salary increased by 0.4% in December compared to the earlier month – a slight recession after October and November saw an increase of 0.5% wage and increment in those months.
Personal savings rate The percentage of disposable income in December was 3.8%. This metric declined from 4.3% in October to 4.1% in November and about 5% in the previous spring.
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Jeffrey Roach, the chief economist at LPL Financial, said, “Despite the viscosity of inflation in recent months, the disruptive trend must be resumed in the spring as services prices are determined to be moderate.” “Currently the personal savings rate is 3.8%, below an average of 6.7%at an average of 2019, which puts the consumer in an uncertain position if the income weakens.”
According to the latest PCE reading of the Department of Commerce, food prices were 1.6% compared to a year ago. (Justin Sulivan / Getty Image / Getty Images)
Comes only two days after the report of the Department of Commerce federal Reserve It was announced that they would keep the interest rates stable in the first break of this rate-cutting cycle after three consecutive cuts.
The Fed reduced its target limit for 50 basis points for the benchmark Federal Funds Rate in September, followed by the 25 base point deduction in November and December.
Energy and food prices promoted inflation in December
Fed Chair Jerome Powell And other central bank policy makers stated that “inflation remains somewhat elevated” and opials to give up rates at 4.25% to 4.5% range, given the uncertainty about changes in economic conditions.
Fed Chair Zerome Powell and Central Bank Policy makers cited uncertainty about stubborn inflation in their decision to leave interest rates unchanged. (Via Mandel Engan / AFP Getty Image / Getty Image)
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According to the CME Fedwatch Tool, Fed is expected to keep the rates stable in its next policy meeting in mid -March, which leaves unchanged rates on Friday with a policy makers’ possibility of 82%. This is just more than 72% a week ago.
