Posted on 04/30/2024 10:38:07 AM PDT by Red Badger
WASHINGTON (Reuters) - Inflation showing no recent sign of slowing or narrowing in scope leaves U.S. Federal Reserve policymakers challenged this week over how to characterize their next steps even as the countdown to a contentious U.S. presidential election continues.
The Fed is seen holding its benchmark interest rate steady at 5.25%-to-5.5% at its April 30-May 1 meeting, and a key judgment in the current policy statement - that inflation "remains elevated" - may have to remain in place after the pace of price increases accelerated over the first three months of the year after steadily slowing through 2023.
Details of the most recent price reports, moreover, showed high inflation lodged across a wide array of goods and services, something current voters on interest rate policy including Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin have focused on as a reason to be wary of cutting interest rates.
Data from March, for example, showed that more than half of the items in the personal consumption expenditures price index - used by the Fed to set its 2% inflation target - saw inflation of greater than 3%, well above the share common before the pandemic.
"The Fed has simply run into a brick wall," Citi Global Chief Economist Nathan Sheets said after data released on Friday showed the PCE index increased at a 2.7% annual pace in March versus 2.5% in February, while the number stripped of volatile food and energy prices was 2.8%, matching February. "This is very strong data and it is not data that has given them any confidence they are meaningfully on their way to 2%...The Fed is simply going to have to wait."
(Excerpt) Read more at finance.yahoo.com ...
Any pilot will tell you the problem with holding patterns is eventually you run out of gas.
Captain Obvious finds an acorn.
There is no soft landing coming. All landings are hard in the financial world.
It will get a lot worse before it gets better....................
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