Reply To: Traders Market Weekly: America on Show; Big Oil, Apple, FOMC and Boeing


Personal income increased 0.3% month-over-month in December, as expected, but personal spending increased a much stronger-than-expected 0.7% (consensus 0.4%).
The inflation gauges were spot-on with expectations. The PCE Price Index was up 0.2% month-over-month and so was the core-PCE Price Index, which excludes food and energy.

With the December changes, the PCE Price Index was up 2.6% year-over-year, unchanged from November, and the core PCE Price Index was up 2.9% — the lowest since March 2021 — versus 3.2% in November.

The key takeaway from the report should be more Goldilocks than anything else: consumer spending is strong and core inflation, which the Fed is targeting, is moving toward the 2.0% target.

Treasuries had a volatile response to the data, but are now little changed from yesterday.

The 10-yr note yield, at 4.11% just before 8:30 ET, hit 4.15% in the immediate aftermath, and pulled back to 4.12% now. The 2-yr note yield was at 4.32% before the data, hit 4.35% in response, but pulled back to 4.32% again.

Core PCE Prices in December at 6 Month Annualized 1.9%, Below Fed’s 2% Target