US Inflation, Federal Reserve Considering Interest Rate Cuts In Upcoming Months

The pulse of US inflation probably continued to decrease at the beginning of the year, leading to the anticipation that the Federal Reserve will be more open to considering interest rate cuts in the upcoming months. The core consumer price index, which excludes food and fuel to provide a clearer view of underlying inflation, is expected to rise by 3.7% in January compared to the previous year.

The US inflation is expected to show the smallest increase compared to the previous year since April 2021, highlighting the efforts of Fed Chair Jerome Powell and his team in controlling inflation. The overall Consumer Price Index (CPI) will likely increase by less than 3% for the first time in almost two years.

US Inflation, Although recognizing the progress, policymakers have been hesitant to consider the possibility of reducing rates as early as next month. Their cautious approach is based on an economy that is showing positive signs, with the most significant being the strong labor market. The consistent employment growth has supported consumer spending. Another report expected to be released on Thursday is anticipated to show yet another rise in retail sales, excluding car and fuel purchases.

The recent increase in consumer confidence can be attributed to the decrease in US inflation and the anticipation of lower borrowing costs later this year. An upcoming University of Michigan survey is expected to reveal that sentiment levels are remaining close to the highest point since July 2021.


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