Fed’s Preferred Inflation Gauge Cools on Robust Spending
- Core PCE index eased to 2.9% last month, lowest since 2021
- Spending posted biggest back-to-back increase in nearly a year
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The Federal Reserve’s preferred gauge of underlying inflation cooled to an almost three-year low even with robust holiday spending, keeping the debate alive over whether officials will soon cut borrowing costs.
The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, increased 2.9% in December from a year earlier, according to the Bureau of Economic Analysis. From a month ago, it advanced 0.2%.