Washington March 12 2024: U.S. consumer prices increased solidly in February amid higher costs for gasoline and shelter, suggesting stickiness in inflation that cast some doubts on whether the Federal Reserve would start cutting interest rates in June.
February marked the second straight month of firmer inflation readings. Inflation-weary Americans, however, got some relief from their grocery bills, as food prices were unchanged. U.S. central bank officials, including Fed Chair Jerome Powell have indicated they are in no rush to start lowering borrowing costs.
The higher cost of living is one of the key issues in the Nov. 5 U.S. presidential election.
“Officials want to see some more evidence of a sustained deceleration in prices towards target before they pivot to rate cuts,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
“The latest data further reinforce the case for a patient and vigilant approach from Fed officials as they consider future policy decisions.”
The consumer price index (CPI) rose 0.4% last month after climbing 0.3% in January, the Labor Department’s Bureau of Labor Statistics (BLS) said on Tuesday. Gasoline prices rebounded 3.8% after declining 3.3% in January. Shelter, which includes rents, rose 0.4% after advancing 0.6% in the prior month.
