Former Kansas City Fed President Thomas Honig responded to Jerome Powell’s statement that the Fed was not ready to start cutting interest rates “coast-to-coast.”
A closely watched inflation report on Tuesday is expected to show progress in combating price pressures in the economy slowed again in February.
Economists expect the consumer price index, which measures a range of goods including gasoline, health care, groceries and rent, to rise 3.1% in February, unchanged from the previous month.
monthly, inflation is seen Higher energy prices led to a 0.4% increase, higher than the 0.3% figure recorded in January.
“We expect [the report] We will see another strong month-on-month increase,” said Brian Rose, senior US economist at UBS Global Wealth Management.
Latest New York Fed survey shows Americans expect high inflation to continue
Other parts of the report are also expected to note a slowdown in the decline in inflation. Core prices, which exclude more volatile food and energy measures, are expected to rise by 0.3% annually, or 3.7%. These figures were 0.4% month-on-month, down slightly from the 3.9% headline increase in January, suggesting that underlying price pressures remain strong.
of federal reserve The target rate is 2%.
Bill Adams, chief economist at Comerica Bank, said, “The CPI index was likely at a high level in February due to rising gasoline prices, but core inflation is expected to rise further due to falling car prices and suppressed rent increases.” It is likely to slow down.”
As high inflation weighs down Americans, 401(K) withdrawals from those in need surge.
A customer visits a supermarket on December 12, 2023 in San Mateo, California. (Photo credit: Li Jianguo/Xinhua News Agency via Getty Images/Getty Images)
The central bank is watching the report closely for evidence that inflation is finally calming as policymakers try to gauge what’s next for interest rates in 2024.
Central bank officials opened the door to rate cuts this year, but they have rebounded against positive market expectations. Jerome Powell Fed Chairman During testimony on Capitol Hill last week, he said policymakers were on track to cut rates in 2024, but were not prepared to do so until they were confident inflation was under control. Ta.
“The committee does not believe it is appropriate to lower the target range until there is greater confidence that inflation is on a sustained path toward 2 percent,” Powell said.
Central bank officials are also considering increase in employment Consumers’ inflation expectations in determining monetary policy.
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Inflation is putting severe economic pressure on most American households, forcing them to pay for necessities like food and rent. The burden falls disproportionately on low-income Americans, whose paychecks are already tight and are highly exposed to price fluctuations.
Although the inflation rate has fallen from its peak of 9.1%, the consumer price index has increased by a staggering 18.13% compared to January 2021, just before prices began to soar.
