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The latest report on economic activity measured fourth quarter gross domestic product (GDP) at 3.3 percent and put the full year rate for 2023 at 2.5 percent. Strong growth was recorded for consumer spending, exports, and business investment.  The positive GDP report helped push the stock market toward new highs, but it left traders wondering if better economic data may still support a hawkish stance from the central bank. Commodities are going to remain extremely sensitive to expectations about interest rate policy changes and their influence on the direction of the dollar.   Decisions on monetary policy made by the Federal Reserve Bank will largely be determined by the outlook for inflation. This morning featured a fresh report on the personal consumption expenditures (PCE) index, which is known to be the Fed’s most closely-watched measure of inflation. The core PCE rate dropped by slightly more than expected to 2.9 percent, but that was still higher than what the Fed is targeting as an ideal level of 2 percent. The market still looks torn between the ideas that inflation is cooling but that prices are still rising fast enough to stir up fear about the effects of interest rates being lowered….

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