US inflation rises moderately at 0.3% in February even as consumer spending jumps; Fed rate cuts on table
Also Read: Fed need not be in hurry to cut rates, inflation data within expectations: Jerome Powell In the 12 months through February, PCE inflation --which strips out the volatile food and energy components, advanced 2.5 per cent after increasing 2.4 per cent in January. The data for January was revised higher to show the PCE price index climbing 0.4 per cent instead of 0.3 per cent as previously reported. Goods prices rose 0.5 per cent last month, boosted by a 3.4 per cent jump in the cost of gasoline and other energy products.
Even though price pressures are subsiding, the pace of rise has slowed from the first half of last year, and inflation remains above the US central bank's two per cent target. Fed officials last week left the central bank's policy rate unchanged in the current 5.25 per cent-5.50 per cent range, having raised it by 525 basis points since March 2022. Policymakers anticipate three rate cuts this year.
Financial markets expect the first rate reduction in June. Most U.S. financial markets were closed for the Good Friday holiday, with the exception of the foreign exchange market.
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