According to the latest report by the Commerce Department, Core inflation eased slightly in February before the recent surge in energy prices.
According to a key indicator released Thursday, the core personal consumption expenditures price index (PCE), which excludes food and energy, increased by a seasonally adjusted 3% in February. Meanwhile, the overall headline inflation measure for all items rose by 2.8%.
Both readings aligned with the Dow Jones consensus. The core annual inflation rate was 0.1 percentage points lower than in January, while headline remained unchanged.
Both core and headline prices increased by 0.4% each month, matching forecasts.
The news comes after the Federal Reserve’s March Minutes, released yesterday, revealed that officials still anticipate interest rate cuts this year, despite the prevailing uncertainty caused by the Iran conflict and Trump’s tariff policies.
“Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations,” the minutes said.
Traders are also increasingly forecasting one rate cut this year, following the U.S.-Iran ceasefire agreement.
The Fed uses the PCE price index as its main measure and forecasting tool for inflation. The Fed, which aims for 2% inflation, considers core as a more reliable indicator of long-term trends.
By CEO NA Editorial Staff
