TextileFuture

By guest author Jeff Sparshott from the Wall Street Journal.

March 15, 2023

Inflation eased in February but remained stubbornly high, presenting a challenge for the Federal Reserve as it confronts how to slow the economy with higher interest rates at the same time it moves to stem banking problems. The consumer-price index, a closely watched inflation gauge, rose 6% in February from a year earlier, down from a 6.4 % gain the prior month, the Labour Department said. It was the smallest increase since September 2021. When excluding volatile food and energy costs, prices advanced a slightly slower 5.5 %. Economists view so-called core prices as a better indicator of future inflation, Gabriel T. Rubin and Nick Timiraos report.

Monthly data showed price pressures persisted in many corners of the economy. Core prices increased by a seasonally adjusted 0.5 % in February, the largest monthly gain in five months. Shelter costs rose 0.8 % over the month, matching the largest monthly gain since the 1980s.

Economists said Tuesday’s (March 14, 2023) consumer-price index report underscored the urgency of the Fed’s inflation fight. Several said they thought it made officials more likely to raise rates next week by a quarter percentage point as long as the banking sector didn’t appear to come under additional stress ahead of its rate decision.

 

🎥 WSJ Video: The Fed’s 2% Inflation Target, Explained (Watch) Heard on the Street: Fed’s Tightening Plans Collide With SVB Fallout (Read) Regional Bank Chaos Clouds Outlook for Markets (Read) Are Taxpayers on the Hook for SVB and Signature Bank Deposits? (Read)

Fed to Consider Tougher Rules for Midsize Banks After SVB, Signature Failures (Read) Lawmakers Split on Tighter Rules After Silicon Valley Bank Failure (Read)

 

www.wsj.com