Prices surprised in February, according to the latest inflation report. (East)
Annual inflation in February increased to 2.8%, which is an unexpected drop with 3.0% in January, according to the consumer prices index (CPI) Published a bureau for the statistics of work (BLS).
Inflation increased 0.2% a month after the previous month increased 0.5%. The basic inflation, which excludes the unstable energy and food prices, increased more than 3.1% in February compared to a year earlier, it slightly decreased from the rate from the previous month of 3.3%. The inflation of residential care (shelter) increased by 4.2%, and food prices have accelerated by 2.6%in the last 12 months, which is slightly slightly against 2.5%in January. Basic inflation and housing recorded their lowest readings since 2021.
Both main and fundamental prices increased by 0.2% compared to the month, aligning with the aim of federal reserves. However, the proposed uncertainty over the proposed imported tariffs of President Donald Trump and their potential impact on future prices remains reason for concern.
“The insecurity around the tariff remains a huge source of concern for investors, consumers and companies equally,” said Jim Baird, the Main Investment Director of Plante Moran Financial Advisors. “Understanding that the rules of the game change is one thing; understanding what these rules will be, and when it will be clearly defined, the other thing is completely.”
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Fed is still likely to stay on to reduce the rate
According to the first American older economist Samu Williamson, a modest improvement in the CPI report is a positive sign for the lasting effort of federal reserves to reduce inflation. Although it may not be enough to trigger a rate of reduction in March, it retains a rate of reduction on the table.
“A little surprise in today’s CPI report, an encouraging sign for the lasting effort of federal reserves to overthrow inflation,” Williamson said. “However, a modest improvement is still not enough to encourage a reduction in March rates, but it potentially gives the FED greater flexibility to consider more reduction of the rate later this year.”
Federal reserves, which held interest rates at 4.25% to 4.50% In January, he is careful. This is a response to strong economic indicators that have given the central bank more space to wait. Jerome Powell’s federal reserve president stated that the central bank intends to remain careful due to additional decreasing rates, as long as the labor market remains solid and the prices continue to climb.
“Many categories have been encouraging disinflation last month, including food, energy and shelter,” Williamson said. “The prices of new vehicles and airline prices have actually decreased for a month during the month. However, the influence of new tariffs has probably not yet been realized, leaving uncertainty about inflation as we approach spring, supporting the cautious approach of the FED in the coming months.”
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Housing remains out of reach
Americans who rent or want to buy a house continue to feel pain due to the increase in housing costs. The shelum inflation, a significant component of the total inflation, is a key factor that needs to be resolved to return the inflation to the Fed aim of 2%. However, lower shelter inflation will not affect the accessibility of housing or lack of residential supply.
“The bad news is that rent rates and home prices will not be massively declining, especially given the investments in the family home in Eri bust after walking,” Baird said. “There will probably be higher prices here. The good news is that the shelter inflation fell by almost half from 8.2% almost two years ago at 4.2% last year. This is a significant, permanent fall to the present, with further runways to return to the norm before the oblique era.”
Recent Realtor.com report At the intervals of the living space, he showed that he reached 3.8 million 2024 and said he would take 7.5 years to close the housing gap and resolve the lack of supply that was the main driver of the apartment accessibility crisis.
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