US Fed's favored inflation gauge rises before rate decision
Federal Reserve's favored measure of inflation ticked higher last month, according to government data published Friday, indicating that its long-running battle against rising prices is not over yet.
The latest announcement will likely ensure the US central bank remains on hold at its next interest rate decision announcement on Wednesday, as policymakers continue talks on when to start cutting.
The personal consumption expenditures (PCE) price index rose at an annual rate of 2.6 percent last month, unchanged from November, the Department of Commerce said in a statement.
On a monthly level, headline PCE inflation rose by 0.2 percent in December, up from a 0.1 percent decline a month earlier. This was in line with market expectations, according to Briefing.com.
The closely-watched "core inflation" measure, which strips out volatile food and energy costs, continued to ease, rising by 2.9 percent in the year to December.
This is likely to reassure the Fed that the direction of travel is the right one, despite the latest uptick in headline prices.
«The inflation data support a shift in the FOMC's policy stance this year, from holding rates steady to lowering them over time,» High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients, referring to the rate-setting Federal Open Market Committee.
«The exact timing will depend on incoming data, on the labor market, inflation and growth,» she added.
Fed officials have taken to the airwaves in recent weeks to indicate that it is too soon to start lowering rates.
«While I think it's appropriate for us to look forward and ask when would policy adjustments be necessary so we don't put a
