February’s Consumer Price Index (CPI) came out on Tuesday, showing that prices rose by 0.4% over the previous month and 3.2% over the previous year. “Core” CPI, which excludes volatile components including food and gas, climbed 0.4% higher compared to January, while on an annual basis, it rose by 3.8%.
Despite consumer prices remaining more sticky than expected, analysts expect that the latest CPI reading will not have a major influence on the Federal Reserve’s monetary policy and the timing of its prospective interest rate cuts. “Things are really where they should be at this point,” Oppenheimer chief investment strategist John Stoltzfus commented, expressing an indifference toward the rise in consumer prices in February.
Both Stoltzfus and chief economist for Manulife Frances Donald agreed that June appears to be a sound time for the U.S. central bank to introduce interest rate cuts. Still, expectations may be pushed back if economic data continues to show significant price increases.