Forex News

23:23:37 31-03-2023

US: PCE inflation is still hot enough to warrant another rate hike in May – Wells Fargo

After the release of the March Core Persona Consumption Expenditure Price Index, analysts at Wells Fargo still expect the Federal Reserve (Fed) to hike interest rates by 25 bps at its May monetary policy meeting.

Inflation moderates, but Fed's job not yet done

“Inflation is slowing, but only gradually. The core PCE deflator rose slightly less than expected, up just 0.3% in February, and inflation data for January were revised lower as well. This is a positive development, but a win can't yet be declared.”

“The Fed has further work to do to get inflation back to its 2% target. The core PCE deflator is still running well-above target at a 4.9% annualized rate the past three months. We'd summarize the inflation development as a step in the right direction, but we think the elevated readings keep the heat turned up on the Fed, and thus still expect the Fed to hike rates an additional 25 bps at its May monetary policy meeting.”

News provided by the portal FXStreet
Contacts
Close
Up