The Americans who hoped to get some inflation in a setback in February, where new data showed that price pressures intensified even before the last President of President Trump’s war escaped.
The personal consumption expenses index, after stripping it of food and volatile energy, increased by 2.8 percent in February of the previous year, as it exceeded the annual January. On a monthly basis, these prices increased by 0.4 percent, which are higher than the monthly increase in January.
The total inflation was 2.5 percent, a level exceeding the goal of the Federal Reserve of 2 percent and has been in its place since November.
The latest data from the Trade Department highlights the challenge of the central bank. Trying more What do you do about interest rates It was complicated by a rapidly escalating trade war, which was born very uncertainty about the economic view.
On Wednesday, Mr. Trump announced a 25 percent tariff for cars and imported auto parts in the United States and pledged to unveil another set of customs duties next week.
With the scope and size of the definitions is not yet clear, a set of other policies related to immigration, taxes and the abolition of restrictions is still resolved, the Federal Reserve has chosen to stand until he gets more clarity about what exactly that Mr. Trump will impose and how consumers and companies will respond.
Last week, the Federal Reserve voted to retain rates of 4.25 percent to 4.5 percent, which has temporarily extended the size since January. This was followed by a series of discounts in late 2024, which reduced borrowing costs by a percentage.
In the new expectations that were issued alongside the price decision, most officials continued to expect cuts of half a percentage this year, in line with the estimates of December. However, eight political makers expect either no additional or only discounts, indicating the scope of expanding views on the path of policy forward.
In general, most officials are preparing for high inflation and low growth this year. By the end of 2025, they expect the basic inflation to stabilize by about 2.8 percent before declining to 2.2 percent the following year. Meanwhile, they expect that growth will slow down to 1.7 percent this year with unemployment to 4.4 percent, a background that they mainly expect to remain in place until 2027.
The survey data already indicates that consumers are preparing for this result as well, although much more.
The data issued by the Conference Council showed this Tuesday Consumer confidence fell again This month and now he sits at its lowest level since January 2021. The shortest scale of income tracking, business market and labor market conditions has decreased to its lowest level in 12 years, transcending the level that usually indicates recession in the future.
Consumers are strained in economic expectations at the same time that their expectations have increased sharply about inflation, at least, according to one of the measures published by the University of Michigan.
Jerome H
