Following the publication of the basic consumer price index for March, analysts at Wells Fargo They continue to expect the Federal Reserve (Fed) to raise interest rates by 25 basis points at its May policy meeting.
Inflation Moderates, but the Fed’s Job Isn’t Done Yet
“Inflation is slowing, but only gradually. The core CPI deflator rose slightly less than expected, just 0.3% in February, and January inflation data was also revised downwards. This is a positive development , but a victory cannot yet be declared.”
“The Fed has to keep working to bring inflation back to its 2% target. The core CPI deflator continues to be well above target, with an annualized rate of 4.9% in the last three months. We would summarize the evolution of the inflation as a step in the right direction, but we think the elevated readings are keeping the Fed under stress and therefore we continue to expect the Fed to raise rates an additional 25 basis points at its May policy meeting.”
Source: Fx Street
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