US Fed’s preferred inflation gauge ticks up as fuel costs rise
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The US central bank’s favored measure of inflation, the personal consumption expenditures (PCE) price index, rose at an annual rate of 2.5 percent in February, up 0.1 percentage points from the previous month. Goods prices rose 0.5 percent, while the costs of services increased by 0.3 percent. The increase in the cost of goods was largely driven by rising fuel prices, which rose 2.3 percent from January. The higher inflation figure may cause concern for President Joe Biden’s reelection campaign team as they seek to convince consumers that the economy is heading in the right direction. However, the Federal Reserve chair, Jerome Powell, stated that the data is in line with expectations and suggests that the bank is still on track towards its long-term inflation target of two percent. The closely watched “core inflation” measure, which excludes food and energy costs, eased slightly, rising by 2.8 percent on an annual basis and by 0.3 percent from January. The data has led some Fed officials to question the prediction of three interest rate cuts this year, with some suggesting a reduction in the number of rate cuts or a delay in their implementation. The Fed is expected to begin removing some policy tightness later this year. The personal income rose by 0.3 percent in February, while personal savings as a percentage of disposable income decreased from 4.1 percent to 3.6 percent. The US financial markets were closed for the Good Friday holiday.

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https://www.brecorder.com/news/40296277