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US witnesses moderate increase in Feb inflation
Photo courtesy: Soumyadev Sarkar/IBNS

US witnesses moderate increase in Feb inflation

| @indiablooms | 29 Mar 2024, 11:40 pm

Washington: The United States witnessed a moderate increase in prices, while the expenses for services excluding housing slowed notably, indicating the possibility of a Federal Reserve interest rate cut in June.

The Commerce Department's Bureau of Economic Analysis reported on Friday that the personal consumption expenditures (PCE) price index went up by 0.3% last month, reported Reuters.

The data for January was revised upwards, indicating that the PCE price index rose by 0.4% instead of the previously reported 0.3%.

Price pressures are diminishing, although the rate of decline has decelerated compared to the first half of the previous year.

Excluding the volatile food and energy sectors, the PCE price index increased by 0.3% last month, it said.

Core inflation, which excludes food and energy prices, grew by 2.8% year-on-year in February, down slightly from 2.9% in January.

PCE services inflation, excluding energy and housing costs, rose by 0.2% last month, following a 0.7% surge in January.

The report also revealed that consumer spending, which contributes to over two-thirds of the U.S. economic activity, rose by 0.8% last month, compared to a 0.2% increase in January.

According to Reuters, policymakers anticipate three rate cuts this year. Financial markets expect the first rate reduction in June. Fed Governor Christopher Waller said on Wednesday, "there is no rush to cut the policy rate" right now, but he did not rule out trimming borrowing costs later in the year.

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