Slower U.S. Inflation Is Set to Fuel Fed Rate-Cut Optimism
The pulse of U.S. inflation likely continued to slow at the start of the year, helping to feed expectations that the Federal Reserve will find interest-rate cuts more palatable in the coming months.
The pulse of U.S. inflation likely continued to slow at the start of the year, helping to feed expectations that the Federal Reserve will find interest-rate cuts more palatable in the coming months.
According to the Labor Department’s Bureau of Labor Statistics updates, the consumer price index showed that, the core CPI, a measure that excludes food and fuel for a better picture of underlying inflation, is seen increasing 3.7% in January from a year earlier. The broad basket of goods and services measured increased 0.2% on the month, less than the originally reported 0.3%. Excluding food and energy, the core CPI increased 0.3% for the month, the same as originally reported.
While the change is only modest, it helped confirm that inflation was moderating as 2023 ended, giving more leeway to the Federal Reserve to start cutting interest rates later this year.
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