#PCEInflationWatch The personal consumption expenditures (PCE) price index, a key measure of inflation for the Federal Reserve, rose 0.1% in November, the smallest monthly increase in six months. Year-over-year, the PCE price index rose 2.4%, slightly below the 2.5% forecast. Excluding food and energy, the core PCE index rose 2.8% annually. Despite these figures, the Federal Reserve expects only two interest rate cuts in 2025, indicating a cautious stance on monetary policy.

In November, U.S. consumer spending rose 0.4%, driven by strong demand for goods and services including new motor vehicles, recreational goods, financial services, and health care. This strong spending, along with moderate inflation, suggests a resilient economy. However, economists note that the gains are concentrated among middle- and upper-income households, with lower-income consumers facing financial strain.

Overall, while inflation remains above the Federal Reserve's 2% target, recent data indicate a slowdown in the rate of increase, leading to expectations of interest rate .