"U.S. Core PCE Price Index Raises Inflation Concerns"

"U.S. Core PCE Price Index Raises Inflation Concerns"


The Core PCE Price Index for January 2025 was released on February 28, 2025. It was projected that inflation would rise 0.3% month-over-month and 2.5% year-over-year

Although the annual price growth has slowed, which may ease concerns about accelerating inflation, it is not yet sufficient to prompt the Federal Reserve (Fed) to cut interest rates, as inflation remains above the Fed’s 2% target.

Additionally, consumers continue to face high costs in areas such as food, housing, and auto insurance, impacting consumer confidence. The Core PCE Index, which excludes food and energy, is expected to increase by 2.6% year-over-year, down from 2.8% in December (barrons.com).

The Core PCE Index is a key inflation gauge closely monitored by the Federal Reserve, as it reflects changes in the prices of goods and services purchased by U.S. consumers (bea.gov).

While the slowdown in inflation may ease concerns about price acceleration, it is still not enough for the Fed to consider cutting interest rates, since inflation remains above the set target.