US core inflation showed increasing pressure as Core PCE rose 0.4%, beating expectations and the previous month's reading, thus supporting the strengthening of the US dollar.
The increase reflects higher consumer spending and the potential for continued inflationary pressures, making the data important for the Fed's monetary policy direction.
However, GDP data showed the US economy growing at a slower-than-expected pace, only 1.4% in the fourth quarter of 2025 compared to the forecast of 2.9%.
The slower growth was partly attributed to lower government spending and exports, as well as a slowdown in consumer spending.
For the full year of 2025, the economy grew 2.2%, slightly slower than 2.8% in 2024.
Despite the moderate fourth quarter growth, private domestic spending remained strong, indicating that economic fundamentals remain stable despite the overall slowdown.
