U.S. Inflation Cools Amid Tariff Uncertainty
2025-01-31 10:45:00 ET
Summary
- The US Fed's favoured inflation measure - the core personal consumer expenditure price deflator - rose 0.2%MoM/2.8%YoY in December as consensus predicted.
- Inflation remains on the path towards 2%, but with huge uncertainty over regulatory, tariff, fiscal and immigration policy, the central bank will be keeping monetary policy unchanged until June, we believe.
- Meanwhile, the employment cost index for fourth quarter 2024 was also in line with expectations, rising 0.9% QoQ.
Today’s US data suggests that inflation remains on the path towards 2%, but with huge uncertainty over regulatory, tariff, fiscal and immigration policy, the central bank can’t leave anything to chance and will be keeping monetary policy unchanged until June, we believe. The Federal Reserve's favoured inflation measure - the core personal consumer expenditure price deflator - rose 0.2%MoM/2.8%YoY in December as consensus predicted, but the good news is that to 3 decimal places it is 0.159%, so below the 0.17% month-on-month we need to average over 12 months to deliver 2% year-on-year. The chart below shows that we are now seeing as many of the MoM readings (blue bars) coming in below the 0.17% black line as we are seeing above, which offers the Fed the flexibility to respond with further rate cuts this year....
Read the full article on Seeking Alpha
For further details see:
U.S. Inflation Cools Amid Tariff Uncertainty
NASDAQ: VGSH
VGSH Trading
-0.15% G/L:
$58.185 Last:
1,336,052 Volume:
$58.20 Open:
