Daily Management Review

Annual inflation in the USA accelerates to 2.5%


The Personal Consumption Expenditures Index released by the U.S. Commerce Department grew 2.5% year over year in February.

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The Federal Reserve System uses this statistic to gauge national inflation when determining the appropriate level of interest rates. This indicator was 2.4% in January. Simultaneously, the index's monthly growth was 0.3% as opposed to 0.4% the previous month.

An increase in the personal consumer spending index is significantly delaying the Fed's intended rate decreases. At the conclusion of its meeting in March, the US Federal Reserve's Open Market Committee decided to maintain the rate at the 5.25–5.50% range.

Since the rate was last increased in July, the regulator has said at each Fed meeting that any additional rate moves will rely on the incoming data. The Fed must be certain that inflation is getting close to its 2% target before it can begin reducing rates. The market had anticipated that the key rate would not be lowered until the fall before the release of today's data.

source: cnn.com