US Inflation Rises to 3.2%, Dampening Hopes for Early Federal Reserve Rate Cuts
The unexpected acceleration in February's consumer price index to 3.2% complicates the Federal Reserve's plans for interest rate reductions, potentially delaying them until June or later.
- February's consumer price index (CPI) rose to 3.2% year-over-year, exceeding forecasts and marking a second consecutive month of higher-than-expected inflation.
- Core inflation, excluding volatile food and energy prices, also increased, signaling persistent price pressures across the economy.
- The Federal Reserve, which has paused its aggressive rate hikes, faces a dilemma as it seeks to balance inflation control with economic growth.
- Housing and gasoline prices were significant contributors to the inflation increase, with shelter costs rising despite some signs of stabilization.
- Analysts now anticipate that the Federal Reserve may delay interest rate cuts until June or later, as it awaits more data confirming a sustainable path towards its 2% inflation target.
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