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PCE inflation December 2024:

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2 months ago

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Customers shop for food at a grocery store on Jan. 15, 2025 in Chicago, Illinois.

Scott Olson | Getty Images News | Getty Images

Inflation closed out 2024 on a strong note, as a price gauge the Federal Reserve focuses on came in well above the central bank’s target.

The personal consumption expenditures price index increased 2.6% on a year over year basis, 0.2 percentage point higher than the November reading and in line with the Dow Jones estimate.

Excluding food and energy, core PCE registered a 2.8% reading, also meeting expectations and the same as the prior month. Though the Fed considers both readings, historically officials have seen core as the better gauge of long-run inflation.

On a monthly basis, headline PCE rose 0.3% while core increased 0.2%, both in line with forecasts as well.

The Fed targets annual inflation at 2%, a level the price gauge has not seen since February 2021.

The report comes two days after the central bank voted unanimously to hold its key interest rate in a range between 4.25%-4.5%, taking a break after three consecutive cuts totaling a full percentage point.

In remarks delivered Friday morning, Fed Governor Michelle Bowman said she expects inflation to decelerate through 2025, but thinks the central bank should stay on hold until there are clear signs that is happening.

“There is still more work to be done to bring inflation closer to our 2 percent goal. I would like to see progress in lowering inflation resume before we make further adjustments to the target range,” Bowman said in remarks before business leaders in Portsmouth, N.H. “I do expect that inflation will begin to decline again and that by year-end it will be lower than where it now stands.”

The report Friday also showed that personal income increased 0.4% as forecast, while spending rose 0.7%, or one-tenth of a percentage point ahead of the estimate.

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Trump’s triple-digit tariff essentially cuts off most trade with China, says economist

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April 10, 2025

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U.S. President Donald Trump attends a cabinet meeting at the White House in Washington, D.C., U.S., April 10, 2025.

Nathan Howard | Reuters

President Donald Trump’s tariff increase on imports from China would basically end most trade between that country and the U.S., according to economist Erica York.

“It depends on how narrowly the tariff is applied or how broadly it’s applied, but generally if you get north of a triple-digit tariff, you are cutting off most trade,” the vice president of federal tax policy at the Tax Foundation’s Center for Federal Tax Policy said on CNBC’s “The Exchange” on Thursday. “There may still be some things without any substitutes that companies just have to foot the bill, but for the most part, that cuts it off.”

Her remarks came amid the market wiping out some of its monster gains seen on Wednesday. The market accelerated declines on Thursday once a White House official confirmed to CNBC that the U.S. tariff rate on Chinese goods now stands at 145%. That total includes the recent hike to 125% from 84% that Trump announced Wednesday as well as a 20% fentanyl-related duty that the president had previously put into effect.

On Wednesday, Trump announced that he’s temporarily reducing the tariff rates on imports from most countries, except China, to 10% for 90 days. In a Cabinet meeting Thursday, the president declined to rule out the possibility of extending the 90-day tariff reprieve.

Taking into account the China tariffs, the baseline 10% levies still in place and other sector tariffs, Trump has still taken the country into its most protectionist stance in decades, even with the pause.

“It’ll take the average tariff rate still to highs that we haven’t seen since the 1940s, so this is major,” the economist added. “It’s huge cost increases. It’s an economic hit. It’s clearly not setting us on a very good path.”

The Tax Foundation estimates that all of the new Trump tariffs will lead to an increase in federal tax revenues of $171.6 billion for this year. That would make Trump’s tariffs the biggest tax increase since 1993, more than the hikes under both former presidents George H.W. Bush and Barack Obama, the institution revealed.

China has said it won’t flinch if trade dynamics were to escalate into a trade war. Just hours prior to Trump’s tariff pause announcement, China raised its retaliatory levies on U.S. imports to 84% from 34%, which went into effect Thursday.

Even with Trump’s reversal, York stressed that the market isn’t in the clear just yet, saying “it’s not like the threat went away entirely.”

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Trump’s tariff blitz faces strong legal challenges

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6 hours ago

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April 10, 2025

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WITH MARKETS gyrating from the tariffs Donald Trump has imposed on around 180 countries, only to pause some of the most punishing ones on April 9th, a conservative organisation has filed a lawsuit challenging an initial round of tariffs the president announced on Chinese imports in February, duties he has since escalated. The New Civil Liberties Alliance (NCLA), which counts Charles Koch, a right-wing billionaire, among its supporters, argues that the president lacked the authority to impose these levies. With Chinese goods still a prime target, the case retains its salience. Similar lawsuits against other tariffs could yet scuttle the boldest—and most destabilising—move of Mr Trump’s second term.

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Donald Trump wants to deport foreign students merely for what they say

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7 hours ago

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April 10, 2025

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“EVERY TIME I find one of these lunatics I take away their visa.” That is how Marco Rubio, the secretary of state, last month described the Trump administration’s push to deport foreign university students who had participated in campus activism. Mr Rubio initially suggested that his department had cancelled at least 300 visas. That number increasingly looks out of date as the deportation campaign has spread beyond elite east-coast schools and for conduct beyond protest and speech. More than 100 students in California alone have had their visas yanked—some of them seemingly for infractions as minor as a speeding ticket.

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