US personal spending rose by 0.4% in December. This matched forecasts.<\/p>\n
The figure points to steady consumer outlays at the end of 2025. No additional data was provided.<\/p>\n
The December personal spending figure of 0.4% confirms our view that the economy is moving along a predictable, albeit slow, growth path. For derivative traders, this lack of surprise removes a key catalyst for immediate market volatility. We see this as reinforcing the Federal Reserve’s patient stance on interest rates heading into the spring.<\/p>\n
With the market digesting this expected data, implied volatility on major indexes is likely to soften in the near term. We saw the VIX dip below 14 after similar in-line data prints during the fourth quarter of 2025, which rewarded traders who were selling option premium. This environment could make strategies like iron condors on broad market ETFs attractive, capitalizing on a range-bound market.<\/p>\n
The focus for us now shifts entirely to future inflation data to time the first potential rate cut, as steady growth alone isn’t enough to force the Fed’s hand. Current Fed funds futures are pricing in a roughly 65% probability of a 25-basis point rate cut by the June 2026 meeting. Any upcoming inflation print that is hotter than expected will cause those odds to fall, creating turbulence.<\/p>\n
While the spending figure was stable, we also note that the personal savings rate fell to 3.4% in the same December report, continuing a trend from last year. This indicates consumers are dipping into savings to maintain spending, a pattern that is not sustainable indefinitely. A further decline in the next report could be a leading indicator of weakness in consumer discretionary stocks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US personal spending increased 0.4% in December, matching forecasts and signaling steady consumer outlays at 2025\u2019s end.<\/p>\n","protected":false},"author":62,"featured_media":17028,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42434","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t