Has the US Federal Reserve won the inflation battle?
Has the Federal Reserve, the US central bank, won the inflation battle? A question raised by the recent data of the Ministry of Commerce, which showed a decline in the inflation rate to a level not far from the target rate of 2.0%.
This decline strengthens Americans’ morale and provides greater reassurance that the US economy is capable of avoiding recession while keeping prices under control.
According to a report in the Wall Street Journal, the Commerce Department said on Friday that the Federal Reserve’s preferred measure of inflation, the personal consumption expenditures price index, fell by 0.1% in November compared to the previous month, which is the first decline since April. April 2020. According to the report, prices rose by 2.6% on an annual basis, which is not far from the Federal Reserve’s target of 2%.
Core prices, which exclude volatile food and energy costs, rose just 1.9% year over year for six months, suggesting the Fed is on track to reach the target. “Stocks saw little change on Friday, the last day of trading before the Christmas holiday, but the three major indices rose for the eighth week in a row,” the report says.
The Dow Jones Industrial Average rose 81 points, or 0.22%, this week to 37,386. Investors in interest rate futures markets now see about a 90% chance that the Fed will cut interest rates by its March meeting, according to CME Group. .
The Wall Street Journal says that consumers, after dealing with crushing price increases and recession fears over the past two years, are adopting more optimistic expectations. On Friday, a gauge of consumer sentiment released by the University of Michigan rose 14% to a five-month high in December, compared with the previous month, as households lowered their expectations for inflation next year.
2023-12-23 14:53:17
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