Annual inflation measures are easing and, on Thursday, the Federal Reserve’s favored measure — the Personal Consumption Expenditures (PCE) index — was released, showing a drop to 2.4% in January, matching expectations and edging towards the Fed’s 2% target.
Core PCE inflation, stripping out food and energy costs, eased to 2.8% as expected, but monthly measures rose by more than expected.
While personal income gathered pace, rising 1% — well above the 0.3% climb seen in December and higher than the 0.4% rise expected — most analysts put this down to the one-off impact of a rise in social security payments.
The data provoked a mixed response from analysts, but most were optimistic that the Fed had won the battle against inflation and that it would soon be back at the central bank’s target.
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Joseph Brusuelas, chief economist at RSM US, said the Fed would remain on track for a June rate cut.
“We were not part of the ...