Underlying US inflation topped forecasts for a second month in February, reinforcing the Federal Reserve’s cautious approach to cutting interest rates.
The so-called core consumer price index, which excludes food and energy costs, increased 0.4% from January, according to government data out Tuesday. From a year ago, it advanced 3.8%.
Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.4% from January and 3.2% from a year ago, boosted by gasoline prices, Bureau of Labour Statistics figures showed.
ADVERTISEMENT
CONTINUE READING BELOW
| Metric | Actual | Estimate |
|---|---|---|
| CPI MoM | +0.4% | +0.4% |
| Core CPI MoM | +0.4% | +0.3% |
| CPI YoY | +3.2% | +3.1% |
| Core CPI YoY | +3.8% | +3.7% |
After a brisk January reading, the report adds to evidence that inflation is proving stubborn, which is keeping central bankers wary of easing policy too soon. Chair Jerome Powell suggested last week that he and his colleagues are getting close to the level of confidence they need to start lowering rates, but some officials have expressed they’d like to see a broader pullback in prices first.
Stock futures and Treasury yields fluctuated after the release.
Other than the upcoming release of the producer price index, this is the last major inflation report the Fed will see before its meeting next week. With policymakers expected to hold interest rates steady for a fifth straight meeting, economists will be looking for clues as to when the central bank will start lowering borrowing costs.
© 2024 Bloomberg
