Today’s Inflation Report Could Be What the Start of What Fed is Hoping to See
44 minutes ago
Friday’s data on Personal Consumption Expenditures (PCE) from the Bureau of Economic Analysis could please officials at the Federal Reserve after a streak of hotter-than-expected inflation reports at the outset of the year suggested the fight against rapidly rising prices was taking a turn for the worse.
The central bank is aiming to tamp down inflation by keeping borrowing costs high for all kinds of loans, discouraging spending and allowing supply and demand to rebalance. Fed officials in recent weeks have said they’ll keep it at its current level, a 23-year high, for as long as it takes to quell inflation.
By itself, one inflation report is unlikely to be enough to convince the Fed that inflation is beaten and they can safely lower the benchmark fed funds rate, economists said. A string of similarly cool inflation reports over the summer, however, could set the stage for a rate cut later in the year, several economists said.
Read more about how tamer inflation revived hope for rate cuts here.
Today is the Last Day Before the Start of Federal Reserve’s Blackout Period
4 hr 17 min ago
Today is the last opportunity for Federal Reserve officials to make comments before the start of the blackout period brackets Federal Open Market Committee (FOMC) meeting.
Today’s scheduled speaker is Atlanta Fed President Raphael Bostic, who will deliver the commencement address at Augusta Technical College this evening.
The blackout period begins on Saturday, June 1, and extends through Thursday, June 13. During that time, Fed officials are prohibited from making comments or issuing statements around monetary policy in the lead-up to the June 11 FOMC meeting.
The blackout period doesn’t include the scheduled press conference from Chair Jerome Powell at 2:30 p.m. on Wednesday, June 12, where he will discuss the Federal Reserve’s decision on interest rates, as well as the FOMC’s views of economic conditions. The Fed isn’t expected to move rates from their current levels of 5.25% to 5.5%.
Central bankers can resume making public comments on Friday, June 14. Chicago Fed President Austan Goolsbee is one official who is scheduled to make remarks that day.
-Terry Lane
Inflation Remains Steady in April
7 hr 4 min ago
Consumer prices, as measured by the Bureau of Economic Analysis’ Personal Consumption Expenditures (PCE) measure, rose 0.3% in April from March. That made for a 2.7% year-over-year gain, according to the inflation measure released Friday.
Those figures were the same as in March and matched predictions from forecasters surveyed by Dow Jones Newswires and The Wall Street Journal.
This result could quell fears that price increases are reaccelerating, which were sparked by hotter-than-expected inflation in the first quarter.
More importantly, “core” inflation, which excludes volatile prices for food and energy, rose 0.2%, slowing down from the 0.3% rate in March. That’s significant because officials at the Federal Reserve pay close attention to core inflation. They see it as an indicator of broader inflation trends and consider it when setting the central bank’s monetary policy, which heavily influences interest rates on all kinds of loans.
