The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred way to measure inflation, rose 0.3 percent in February, while the annual inflation rate rose to 2.4 percent in February, up 0.1 percentage points from January. The number excluding volatile food and energy prices rose 0.3% on a month-to-month basis, slightly faster than anticipated.
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Federal Reserve Chair Jerome Powell indicated the latest PCE report did not undermine the central bank’s baseline outlook, but said with the economy on a “strong” footing, “that means we don’t need to be in a hurry to cut.”
Some details of the PCE data for February, economists noted, showed improvement in aspects of inflation that the Fed considers important, even as the headline numbers have shown little progress in the first two months of the year.
The central bank last week held its benchmark overnight interest rate steady in the 5.25%-5.50% range and also reaffirmed – narrowly – a baseline projection that the rate will fall by three-quarters of a percentage point by the end of 2024.
Source: Howard Schneider and Ann Saphir, New US inflation data ‘along the lines’ of what Fed wants, Powell says, Reuters, March 29, 2024. https://stocks.apple.com/A8OnyemvKT4ue7DzP7DFCdg