OAN’s James Myers
8:29am – Friday, March 29, 2024
Inflation, as measured by a measure recommended by the Federal Reserve, rose one-tenth of a point in February from the previous reading, according to federal data.
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The personal consumption expenditure price index, the Federal Reserve’s preferred indicator of inflation, rose 0.3% in February. The annual inflation rate rose to 2.5% in February, up 0.1 percentage point from January.
Additionally, “core” inflation, which excludes volatile food and energy prices, rose to 0.3% in February, following a 0.4% rise in January. Compared to the same month last year, the core inflation rate remained at 2.8% since January.
“Price growth continues to slow slowly. It’s like watching a child run a long distance. From an unsustainable sprint that peaked in mid-2022, to where we are now. to the sputtering tempo we’re witnessing. Occasionally, the economy accelerates briefly, but overall it’s losing momentum,” data analyst Elizabeth Renter said. Nerd wallet.
“A 0.3% rate hike in February and a 0.5% upward revision in January suggest that inflation is too high for Fed officials to cut rates this summer,” said Chris Rupkey, the paper’s chief economist. ” he said. FWDBONDS.
Inflation, as tracked by the CPI, rose to 3.2% in the year ending in February, according to a report from the Bureau of Labor Statistics. However, the CPI inflation rate has remained between 3% and 3.7% since June 2023, but has never fallen into the 2% to 3% range.
Meanwhile, the central bank has raised interest rates from near zero to a staggering range of 5.25% to 5.5% from March 2022 to July 2023. The inflation rate has fallen slightly since reaching 9% in June 2022, but remains below the Fed’s 2% inflation target.
“To be clear, the Fed is not going to wait until inflation actually hits 2% to start cutting rates. Rather, they want to make sure price growth is heading there.” Renter said.
Additionally, Fed Chairman Jerome Powell warned in a press conference on Wednesday that inflation was on a “bumpy” and “uncertain” path to its goal during March.
But in new economic forecasts released ahead of the press conference, Federal Open Market Committee (FOMC) officials expected three rate cuts in 2024.
“We believe our policy rates have likely reached the peak of this tightening cycle, and if the economy continues broadly as expected, it would be appropriate to begin reducing policy restraint at some point this year,” Powell said. It’s very likely.”
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