PCE inflation in the United States increased more than expected in December, with the monthly core index reaching 0.4%, a development that could delay interest rate cuts. According to the Bureau of Economic Analysis, core inflation rose to 3.0% on an annual basis and remains above the 2% target. Data from the Bureau of Labor Statistics also points to continued stickiness in services inflation, although some components remain highly volatile. Economists, including Barclays analysts, believe this trend will likely prevent the Federal Reserve from cutting rates before June.

US economic growth in the fourth quarter came in below expectations, with annualized GDP rising only 1.4%. Data from the Bureau of Economic Analysis shows that the prolonged government shutdown and weaker trade were key factors behind this weakness. Despite the slowdown, the American consumer and heavy investment in artificial intelligence infrastructure have continued to support the economy. Donald Trump described the shutdown’s impact as significant, while core inflation remains elevated and complicates the monetary policy path. As a result, Federal Reserve officials currently prefer to keep interest rates unchanged until a clearer picture of inflation and growth emerges.

Rachel Reeves, the UK Chancellor, is approaching her Spring Statement supported by a set of better than expected economic data. According to the ONS report, the January budget surplus reached a historic record and retail sales climbed to their highest level in 20 months. At the same time, the S&P Global Purchasing Managers’ Index rose to 53.9, signaling a return of private sector activity to expansion territory. Despite the positive data, political pressures and the Labour Party’s weaker standing in polls continue to pose risks to Reeves’ political future.

Donald Trump, the President of the United States, increased the tariff rate to 15 percent only one day after announcing a 10 percent tariff on imported goods. In a message posted on social media, he described the decision as a response to a recent Supreme Court ruling that found his administration’s use of emergency powers to impose tariffs unlawful. The move has created new trade tensions and raised uncertainty about the timing of implementation. Given the cancellation of the government’s special authorities, experts see the legal path for these tariffs as challenging, and the issue is expected to become a central topic in the upcoming State of the Union address in Congress.