Yes

>>US Consumer Confidence and PCE Inflation: Key Indicators Guiding the Federal Reserve’s 2025 Policy Decisions

US Consumer Confidence and PCE Inflation: Key Indicators Guiding the Federal Reserve’s 2025 Policy Decisions

crypthub

about 7 hours ago

Key Indicators

The Conference Board’s Consumer Confidence Index and the BEA’s PCE inflation report are central gauges of U.S. economic health. Confidence reflects households’ outlook on current and future conditions, while PCE is the Federal Reserve’s preferred inflation measure. Together they shape monetary‑policy decisions, with core PCE (excluding food and energy) offering a clearer view of underlying price pressures.

Economic Context

December 2024 PCE showed inflation at 2.3% YoY, slightly above the Fed’s 2% target, and confidence has been volatile but edging higher. Labor market resilience and wage growth above pre‑pandemic levels support spending despite sticky services inflation. Market consensus expects January confidence around 104.5 and core PCE between 2.2%‑2.4% annually.

Policy Outlook

Fed officials weigh both metrics to balance price stability with maximum employment, emphasizing data‑dependent decisions. Persistent services inflation may delay rate cuts, while robust consumer sentiment suggests continued growth. analysts project rates staying steady through Q1 2025, with potential adjustments in Q2 if inflation eases.

Methodology & Limitations

TD Securities combines quantitative models with survey component weighting, giving greater emphasis to expectations over present‑situation responses. Survey biases and PCE methodological differences are mitigated through seasonal adjustments and outlier corrections. Revised data can alter early interpretations, so ongoing monitoring remains essential.