The Fed hopes to see more evidence that the inflation rate is alleviating inflation before restoring interest rates. The latest data presents a mixed picture.
The central bank’s preferred inflation measure was released on Friday, an increase of 2.6 % from December last year, faster than 2.4 % in November, and faster than the central bank’s 2 % goal. Compared with last month, the price rose 0.3 %.
The data from the Ministry of Commerce showed that after depriving the cost of volatile food and fuel, the “core” inflation rate was 2.8 %.
Price pressure has always been the Fed’s decision to restore the speed of reducing the speed after deciding this week. This is a focus. Since September, interest rates have dropped by one percentage point, and now they are hovering between 4.25 % and 4.5 %.
Under the title number, the details indicate that the potential inflation has been stable. Monthly, the core inflation rate rose by 0.2 %, roughly consistent with the growth of November.
The Fed Chairman Jerome H. Powell said that in order to make the Fed’s reducing tax rate again, it will need to further progress in inflation or weak labor markets.
The latest data supports the Federal Reserve’s point of view, that is, it does not need to rush to reduce interest rates. The economy has not been false. Last year, it ended with strong opinions. After the GDP was adjusted by inflation in the fourth quarter, the fourth quarter increased with an annual rate of 2.3 %. The labor market has also performed well, and it has enhanced officials’ confidence in recession is still a distant prospect.
The uncertainty about President Trump has also confused this prospect. Mr. Powell told reporters this week that officials are “how to wait to see which policies.”
He said: “We need to clarify these policies and even start a reasonable assessment of their impact on the economy.”
Most economists predict that the tax levy of Mr. Trump, including 25 % of taxation in Mexico and Canada this week to increase consumer prices to some extent. Over time, they also think they will not be conducive to growth.
In this context, investors are largely expected to increase interest rates by double this year, or a total of half percentage points will be reduced from June. Mr. Powell hinted that he supported the support of additional tax rates, describing the current policy environment of the Federal Reserve this week as “meaningful restrictions”, or a block that helps maintain inflation.
