The Federal Reserve's preferred gauge of inflation showed the pace of price increases is slowing.

PCE Sees Smallest Annual Gain Since 2021

In the latest sign that inflation might be cooling down the Fed's preferred gauge of inflation out today, showing the pace of price increases is slowing the core personal consumption expenditures index, also known as P. C. for short seeing its smallest annual gain since October 2021. Core PC measures the prices consumers pay for goods and services but excludes volatile food and energy prices. Well the annual core figure coming in at 4.4% above the Fed's 2% target. And in some other words, even though it was the slowest annual increase in more than a year, inflation does still remain elevated. Investor is paying close attention to the P. C. E. Because the Fed closely watches the measurement when assessing its monetary policy. Further signs of slowing inflation could mean slower interest rate hikes in the future as the Fed's next meeting is set to start next week and we will get an interest rate decision on Wednesday likely expected to be another. Well a smaller hike I should say of just a quarter of a percentage point And as inflation shows signs of easing, Americans limited their spending in December. New data showing household spending down .2% last month consumers cutting back on spending on goods like cars but spending did rise for services. Um for example think housing and airfare well lower spending and this is another indication of an economic slowdown as americans are not willing to spend money makes sense. Perhaps after spending some pre holidays just cooling the jets a little bit