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Consumer prices rise in February; no rate hikes on the horizon
On a seasonally-adjusted basis, overall consumer prices increased 0.2 percent in February. NAFCU Chief Economist and Vice President of Research Curt Long said this report indicates that the Federal Reserve may hold off on future rate hikes.
According to data published Tuesday by the Bureau of Labor Statistics, the overall CPI stayed at 1.5 percent over the 12-month period.
"Stripping out that volatile element, core prices have hovered just above 2 percent for the past year,” Long said in a NAFCU Macro Data Flash report. "Meanwhile, the Fed's preferred measure for inflation – the personal consumption expenditures index – rose just 1.7 percent on its last reading. That is comfortably below the Fed's 2 percent target and affords plenty of room to hold off on rate hikes for the time being.
"A rate increase in the first half of 2019 is nearly out of the question, and it is becoming less likely that one will occur at all this year," Long added.
Core prices (excluding food and energy costs) increased 0.1 percent in February compared to the previous month. Year-over-year core CPI growth remained at 2.1 percent.
Energy prices increased 0.4 percent in February following a 3.1 percent decrease in January. From a year ago, energy prices were down 5.1 percent. Food prices rose 0.4 percent in February; on a year-over-year basis, food prices were up 2 percent.