US PCE Inflation Hits 2.9% in December as Core Pressures Remain Sticky

The US Department of Commerce reported that headline Personal Consumption Expenditures (PCE) inflation reached 2.9% on a year-over-year basis in December. Core PCE inflation, which excludes volatile food and energy components, came in slightly higher at 3.0%, indicating persistent underlying price pressures. These figures suggest that core inflation remains sticky, potentially complicating the Federal Reserve's outlook for interest rate cuts in the near term. Policymakers may be encouraged to maintain restrictive monetary settings for a longer duration to ensure inflation returns to its 2% target. The data has provided support for the US Dollar (DXY) while weighing on non-yielding assets like Gold and Treasury bonds as markets recalibrate rate expectations.