The United States has released inflation data based on Personal Consumption Expenditures (PCE), significantly impacting market movements during trading on Friday (December 20, 2024).
The PCE inflation was reported to have grown by 2.4% year-on-year (YoY) in November, falling short of the Trading Central forecast of 2.5% YoY but rising from the previous month’s 2.3% YoY.
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Meanwhile, the core PCE inflation was reported at 2.8% YoY, lower than the forecast of 2.9% YoY, yet remaining consistent with the growth of 2.8% YoY seen in October.
The PCE inflation is a key indicator for the Federal Reserve in determining monetary policy, making this data release highly influential in financial markets.
Following the PCE announcement, the price of Gold surged to approximately $2,609 per troy ounce, marking the highest daily level. Over the same period, the US dollar faced pressure; EURUSD rose to around 1.04191, GBPUSD climbed to 1.25542, and USDJPY fell to 156.338, while the Nasdaq index, previously plummeting close to 21,000, managed to recover.
The stagnation in core PCE growth raises hopes for a potential decline in the future, allowing for the possibility of the Federal Reserve adopting a more aggressive approach to interest rate cuts next year.
As noted in the monetary policy announcement early Thursday, the Fed projected that it would reduce interest rates only twice in the upcoming year. However, if core PCE growth continues to decelerate, the Fed may have the leeway to cut rates a bit more aggressively.
