In December 2024, inflation in the United States, as measured by the personal consumption expenditures (PCE) price index, increased by 0.3% from the previous month, raising the annual rate to 2.6%, above the 2% target set by the Federal Reserve (Fed).
The core PCE, which excludes volatile food and energy prices, rose 0.2% in December, keeping the annual rate at 2.8% for the third consecutive month.
The continued rise in inflation, combined with robust growth in consumer spending, suggests that the Fed may delay interest rate cuts planned for 2025.
Fed Chairman Jerome Powell acknowledged that inflation remains above target and indicated that the institution does not expect to reach its 2% target for another year or two.
In light of this scenario, the Fed opted to keep interest rates unchanged, interrupting a series of cuts that began in September, adopting a cautious stance before considering new reductions to avoid additional economic instability.
