The Federal Reserve may be inclined to introduce interest rate cuts in June following the release of February’s Personal Consumption Expenditures index. The “core” reading, which excludes volatile food and energy costs, came in at 2.8%, down from the 2.9% reading in January.
Core prices rose by 0.3% from January to February, thereby falling in line with expectations and decreasing from the 0.5% rise in January compared to the previous month. While Fed Governor Chris Waller stated that a few more months of positive data will be needed to convince the Fed to cut its rates, some economists are confident that the central bank will introduce rate cuts if data continues down this path.
“By the time the Fed meets in June, the data should be convincing enough for them to commence its rate normalization process. But where we sit today, markets need to have the same patience the Fed is exhibiting.” LPL Financial chief economist Jeffrey Roach reflected.