The president of the federal reserve, Jerome Powell, explains how political decision -makers will work to determine if the prices contribute to what is already persistent inflation.
The Federal Reserve favorite inflation gauge has shown that prices increased in February at a rate that continues to exceed the target level of the central bank in the middle of its continuous efforts to reduce inflation.
Friday, the trade department reported that the Personal consumption expenditure (PCE) The index increased by 0.3% compared to the previous month and by 2.5% on an annual basis. These figures were in accordance with the estimates of the economists interviewed by LSEG.
Core PCE, which excludes volatile food and energy prices, increased by 0.4% for the month and by 2.8% compared to a year ago, slightly higher than estimates of 0.3% and 2.7%, respectively.
The decision -makers of the federal reserve focus on the figure of the PCE, as they try to slow down the rate of price increases to their 2%objective, although they consider the basic data as a better indicator of inflation. The PCE’s head was unchanged from January to 2.5%, while the Core PCE obtained an increase of 2.6% last month.
Goods price increased by 0.4% on an annual basis in February, a slower rate than the 0.6% declared in January – although the prices of the goods were relatively stable or even down in the previous months. Service prices increased by 1% in February, a slightly slower pace than the annual growth of 1.6% reported last month.
Wages and wages increased by 0.4% on a monthly basis in February, against 0.2% a month ago.
The personal consumer expenditure index (PCE) for February was largely in line with economists’ expectations, although the basic prices are slightly higher than expected. (Hannah Beier / Bloomberg via Getty Images / Getty Images)
The staff savings rate As a percentage of disposable income of 4.6% in February, against 4.3% last month and an increase greater than the range of 3.3% to 4.3%, it was in the last half of 2025.
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The report of the Commerce Department comes as Federal reserve Evaluates economic data before her next political meeting in May when she monitors the inflation and health of the labor market.
The president of the federal reserve, Jerome Powell, said at a press conference last week when the Fed held stable rates for its second consecutive meeting, that the central bank is not in a hurry to reduce interest rates and seek to assess the impact of Trump administration prices on inflation.
The president of the federal reserve, Jerome Powell, reported that the Fed was not in a hurry to reduce rates because he monitors inflation and health of the labor market. (Michael M. Santiago / Getty Images / Getty Images)
“It seems that a Fed“ Wait ” has even more waiting to do, “said Ellen Zentner, chief economic strategist of Morgan Stanley Wealth Management. “Reading the inflation greater than that of the day upwards that expected was not exceptionally hot, but that will not speed up the Fed calendar to reduce interest rates, in particular given the uncertainty surrounding the prices.”
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The expectation of the market is that the Fed will leave the prices unchanged for a third consecutive time when it will meet in early May. Friday, the probability that the prices are maintained was just over 90%, compared to more than 85% per week, according to the CME Fedwatch tool.