Washington, DC
Inflation still sticky: Consumer prices in the US rose 3.2% in February from a year earlier – the second consecutive month of higher-than-expected inflation. The rise was fuelled by more costly motor insurance, used-car prices, air fares and clothing. Annual core inflation, which excludes volatile food and energy prices, fell to 3.8% from 3.9% in January. Analysts had expected core inflation, which is considered a better measure of underlying inflationary pressures, to slow to 3.7%. The Federal Reserve, under chair Jerome Powell (pictured), will decide on Wednesday whether to keep its benchmark short-term interest rate at a 23-year high of between 5.25% and 5.5%, where it has been since last July. The market is still pricing in a rate cut in the first half of this year and believes a soft landing is within reach.
The inflation reading should look much better in the coming months, “but if the Fed waits for a streak of two or three good reports before cutting rates, then policymakers may find themselves sitting on their hands
