WASHINGTON D.C. – The U.S. Bureau of Economic Analysis reported on the 28th that the Personal Consumption Expenditures (PCE) price index, a key inflation gauge for the Federal Reserve (Fed), rose by 2.5% year-over-year in January. This figure aligns with market expectations. This marks a slowdown in the PCE index's upward trend, which had been rising since September of last year, reaching a low of 2.1% (the lowest in three years), followed by 2.3% in October, 2.4% in November, and 2.6% in December. On a month-over-month basis, the index increased by 0.3%.

The PCE index, which measures the prices paid by U.S. consumers for goods and services, is used by the Fed to assess inflation against its target of 2%. By category, housing and utilities costs surged by 29% year-over-year, while restaurant and accommodation services rose by 13%. Energy, including gasoline, increased by 11.6%, and financial services and insurance by 3.4%. Conversely, prices for automobiles and parts (-41.1%), other nondurable goods (-10.4%), and food and beverages (-4.3%) declined.

The core PCE inflation rate, which excludes volatile food and energy prices, was 2.6%, in line with market estimates. It decreased by 0.2 percentage points from the previous month. Real consumer spending, adjusted for inflation, fell by 0.5% month-over-month, the largest drop in four years. Bloomberg News described the report as "providing relief from inflation concerns" as it signals a reversal in the upward trend of prices since late last year. This has led to speculation that the Fed may accelerate its timeline for interest rate cuts.

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