According to new data released by the US Department of Commerce, in December 2022, the core personal consumption expenditures (PCE) price index – which excludes food and energy prices – increased by 4.4% from a year earlier. , down from 4.7% in November. This is the lowest annual increase since October 2021.
The consumer price index (CPI) in the US posted its biggest monthly decline since the beginning of the pandemic, and its lowest annual gain in more than a year.
Discount scenario
On the other hand, markets like gold will be under great pressure if the Fed acts more aggressively than observers forecast. Because the US central bank’s interest rate increase by 0.25 percentage points has been reflected in the market price.
Some signs indicate the Fed may still need drastic action. Last week, precious metal prices plummeted from nine-month highs due to new data on US GDP growth in the fourth quarter of 2022.
Specifically, according to data released by the US Department of Commerce on January 26, the US GDP in the fourth quarter of 2022 recorded a growth rate of 2.9% over the previous year.
| The gold market has grown strongly in the past month. Photo: Trading Economics. |
The growth rate was slightly lower than the 3.2% rate in the third quarter of 2022, but exceeded the 2.8% forecast of economists surveyed by Dow Jones.
Consumer spending – which accounts for regarding 68% of GDP – increased 2.1% in the last quarter of 2022, down slightly from 2.3% in the previous period but remained positive.
The data shows that the US economy is holding up better than the market expected. This might force the Fed to act more aggressively to curb inflation.