OAN’s James Meyers
8:29 AM -Friday, March 29, 2024
According to federal data, inflation increased in February, as measured by the gauge favored by the Federal Reserve, rising one-tenth of a percentage point from the previous reading.
The personal consumption expenditures price index, the Federal Reserve’s preferred way to measure inflation, rose 0.3% in February. The annual inflation rate rose to 2.5% in February, up 0.1% points from January.
Additionally, “core” inflation, which excludes volatile food and energy prices, clocked in at 0.3% in February after a 0.4% increase in January. Year-over-year, core inflation then stayed put at 2.8% from January.
“Price growth continues to slow, slowly. It’s a little like watching a kid do a long-distance run. From the unsustainable all-out sprint we witnessed peaking in mid-2022, to the sputtering tempos we’re witnessing now. Occasionally, there’s a brief quickening, but overall we’re losing steam,” said Elizabeth Renter, a data analyst at NerdWallet.
“Inflation looks too high for Fed officials to entertain rate cuts this summer with a 0.3% increase in February and upwardly revised 0.5% in January,” said Chris Rupkey, chief economist at FWDBONDS.
According to a report from the Bureau of Labor Statistics, inflation tracked by the CPI rose to 3.2% for the year ending in February. However, CPI inflation has stayed between 3% and 3.7%, since June 2023 but has not once fallen into the 2%-3% range.
Meanwhile, between March 2022 and July 2023, the central bank hiked interest rates from close to zero to a staggering range of 5.25% to 5.5%. Inflation has decreased slightly since it topped 9% in June 2022, but it has not reached the Fed’s 2% inflation goal.
“To be clear, the Fed isn’t going to wait for inflation to actually hit 2% before they begin cutting rates. Rather, they want to ensure the price growth rate is headed there,” Renter said.
Furthermore, at a press conference on Wednesday, Fed Chair Jerome Powell warned that inflation during March was on a “bumpy” and “uncertain” path to its goal.
However, new economic projections that were released ahead of the press conference, Federal Open Markets Committee (FOMC) officials predicted three rate cuts in 2024.
“We believe that our policy rate is likely at its peak for this tightening cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said.
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