Staff Reports
The latest news on inflation is in, and it’s not looking good for President Joe Biden and the Federal Reserve. The personal consumption expenditures price index, the Fed’s favorite way to measure inflation, crept up to a 2.5% annual rate in February. That’s a tenth of a percentage point higher than the previous reading. Talk about a punch in the gut for good ol’ Joe and his friends over at the Fed.
Inflation rose slightly to 2.5% in February in gauge preferred by Fed https://t.co/u9b13jiqrO https://t.co/u9b13jiqrO
— Washington Examiner (@dcexaminer) March 29, 2024
And it gets worse. Inflation rose by 0.3% from January to February, a bit less than what everyone was crossing their fingers for. But hold on to your hats, because the core PCE inflation, which takes out wobbly energy and food prices, is still hanging around at a whopping 2.8% year-over-year rate.
This isn’t the only report to rain on Biden and the Fed’s parade. The consumer price index (CPI) and the producer price index (PPI) also decided to join the fun. The CPI sprinted up to 3.2% for the year ending in February, and the PPI surprised everyone by leaping way higher than anyone anticipated.
Economists have been scratching their heads, wondering when the Fed will finally start cutting rates. Investors have been crossing their fingers for some market-boosting rate cuts, but it looks like their dreams might not come true just yet. Initially, there was talk of six rate cuts in 2024, and Wall Street was practically throwing a party, thinking it would happen as soon as this month.
The economy has actually held up pretty well, despite the higher interest rates. The GDP growth for the fourth quarter got a little pat on the back, with a revision showing a 3.4% seasonally adjusted annual rate. And let’s not forget about the labor market. It’s been chugging along, outperforming everyone’s expectations and racking up positive jobs growth for what feels like forever.
