The underlying U.S. inflation rate exceeded expectations for the second straight month in February, reinforcing the Federal Reserve's cautious stance on lowering interest rates.
The so-called core consumer price index, which excludes food and energy costs, rose 0.4% from January, according to government figures released on Tuesday. This was an increase of 3.8% compared to a year ago.
Economists believe the core index is a better indicator of underlying inflation than the overall CPI. According to statistics from the U.S. Department of Labor's Bureau of Labor Statistics, this figure rose 0.4% from January and 3.2% from the same month last year due to the impact of gasoline prices.
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metric | actual | estimate |
---|---|---|
CPI m/m | +0.4% | +0.4% |
Core CPI m/m | +0.4% | +0.3% |
CPI year-on-year change | +3.2% | +3.1% |
Core CPI YoY | +3.8% | +3.7% |
Following strong January data, the report found inflation to be stubborn and added further evidence that central bankers are wary of easing policy too soon. Chairman Jerome Powell signaled last week that he and his colleagues were nearing the level of confidence needed to start cutting rates, but some officials have said they want to see a broader decline in prices first. are doing.
Stock futures and Treasury yields fluctuated after the announcement.
Aside from the upcoming release of the producer price index, this will be the last major inflation report the Fed will see before next week's meeting. Policymakers are expected to keep interest rates on hold for a fifth consecutive meeting, and economists will be looking for clues as to when the central bank will start lowering borrowing costs.
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