Inflation rose to 2.7% in March in preferred Fed gauge
By
Zachary Halaschak
April 26, 2024 8:33 am
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Inflation ticked up to 2.7% for the year ending in March, as measured by the personal consumption expenditures price index, which is the gauge favored by the Federal Reserve.
The 0.2 percentage point rise in headline inflation reported Friday morning by the Bureau of Economic Analysis is bad news for the Fed, which is working to quash inflation by keeping interest rates elevated. The consensus among economists was that PCE inflation would punch in at 2.6%. The Fed’s target is 2% inflation in the PCE index.
From February to March, inflation rose 0.3%, which is about in line with forecast expectations.
Core PCE inflation, a measure of inflation that strips out volatile energy and food prices, rose to a 2.8% year-over-year rate.
“Net, net, this wasn’t the data the doctor ordered for Fed officials looking for confidence that inflation was back on a downward path, so those three rate cuts penciled in for this year may get cut back to just a couple, assuming inflation slows in the second quarter,” said Chris Rupkey, chief economist at FWDBONDS.
The news comes a day after the GDP report, which showed that economic expansion fell well short of expectations in the first quarter of the year. The economy expanded at a 1.6% seasonally adjusted annual rate in the first quarter, far short of the 2.5% that was expected.
Friday’s PCE index report follows two other inflation reports for March — the closely watched consumer price index and the producer price index, which measures the prices paid by producers.
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https://www.washingtonexaminer.com/policy/finance-and-economy/2980110/inflation-rose-to-2-7-in-march-in-preferred-fed-gauge/
