{"id":2313,"date":"2023-03-14T20:03:27","date_gmt":"2023-03-15T01:03:27","guid":{"rendered":"https:\/\/embarrdowns.com\/february-cpi-rises-in-line-with-expectations-fed-likely-to-aggressively-raise-rates\/"},"modified":"2023-03-14T20:03:28","modified_gmt":"2023-03-15T01:03:28","slug":"february-cpi-rises-in-line-with-expectations-fed-likely-to-aggressively-raise-rates","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/february-cpi-rises-in-line-with-expectations-fed-likely-to-aggressively-raise-rates\/","title":{"rendered":"February CPI Rises in Line with Expectations, Fed Likely to Aggressively Raise Rates"},"content":{"rendered":"

The U.S. Consumer Price Index (CPI) rose 0.4% in February compared to the previous month, in line with expectations, while the core CPI, which strips out food and energy prices, rose 0.5%, higher than the 0.4% increase expected.[0]<\/a><\/sup> Year over year, costs climbed by 6%, a drop from January\u2019s 6.4%, and the smallest annual increase since September 2021.[1]<\/a><\/sup> <\/p>\n

The Federal Reserve began aggressively raising interest rates a year ago to tame inflation and have hiked rates by a cumulative 4.5% over the past year.[2]<\/a><\/sup> That has driven up mortgages and other borrowing costs, while also keeping home prices low.[1]<\/a><\/sup> Prices for food and shelter also increased in February, with the shelter index rising 0.8% over the month.[3]<\/a><\/sup> <\/p>\n

The Fed is likely to prioritize price stability over financial instability when it meets next week, with traders now pricing in a 85% chance that the Fed will increase the rate by a quarter point, according to a CME Group estimate.[4]<\/a><\/sup> Jeffrey Roach, chief economist for LPL Financial, made the case for a 0.25% rate increase later this month.[5]<\/a><\/sup><\/p>\n

However, recent bank failures and market volatility have complicated the picture. The medicine the Fed has taken to address financial system challenges, such as the Fed’s new bank lending facility and making all depositors whole, could help the Fed determine whether to press pause or continue raising rates.[6]<\/a><\/sup> <\/p>\n

Sarah House, senior economist at Wells Fargo Economics, believes that if the medicine proves effective, the Fed will continue to gradually tighten monetary policy in the months ahead.[7]<\/a><\/sup> <\/p>\n

Overall, the latest numbers are likely to keep the Fed\u2019s rate-setting committee on track to raise rates by 0.25 percentage points at its upcoming meeting March 21-22.[8]<\/a><\/sup> That could dial down the recent importance of the CPI and keep inflation under control.[6]<\/a><\/sup><\/p>\n

0. <\/span>“Stock market news today: Stocks, regional banks rally as CPI comes in as expected” Yahoo News, 14 Mar. 2023, https:\/\/news.yahoo.com\/stock-market-news-today-live-updates-march-14-2023-112356261.html<\/a><\/a><\/p>\n

1. <\/span>“The New Inflation Report Has Some Signs of Hope” The New Republic, 12 Mar. 2023, https:\/\/newrepublic.com\/post\/171130\/bls-inflation-report-march-2023<\/a><\/a><\/p>\n

2. <\/span>“March 13, 2023 Latest on the Silicon Valley Bank collapse” CNN, 13 Mar. 2023, https:\/\/www.cnn.com\/business\/live-news\/silicon-valley-bank-collapse-updates-03-13-23\/h_032ef854980c1aeac8c265af8b9fe711<\/a><\/a><\/p>\n

3. <\/span>“Consumer Price Index News Release – 2023 M02 Results” Bureau of Labor Statistics, 14 Dec. 2016, https:\/\/www.bls.gov\/news.release\/cpi.htm<\/a><\/a><\/p>\n

4. <\/span>“Banks will be OK. Inflation is still a nasty problem.” The Boston Globe, 14 Mar. 2023, https:\/\/www.bostonglobe.com\/2023\/03\/14\/business\/banks-will-be-ok-inflation-is-still-nasty-problem\/<\/a><\/a><\/p>\n

5. <\/span>“4 Experts Agree Following CPI Inflation Print: Housing Appears To Be Inflating Data, But The Fed Will Not” Benzinga, 14 Mar. 2023, https:\/\/www.benzinga.com\/news\/23\/03\/31344999\/4-experts-agree-following-cpi-inflation-print-housing-appears-to-be-inflating-data-but-the-fed-will<\/a><\/a><\/p>\n

6. <\/span>“Will the Fed keep raising interest rates? : The Indicator from Planet Money” NPR, 14 Mar. 2023, https:\/\/www.npr.org\/2023\/03\/14\/1163486839\/the-feds-new-dilemma-protect-banks-or-fight-inflation<\/a><\/a><\/p>\n

7. <\/span>“February CPI Report: What the Experts Are Saying About Inflation” Kiplinger’s Personal Finance, 14 Mar. 2023, https:\/\/www.kiplinger.com\/cpi-report-inflation-fed-rate-hikes-prices<\/a><\/a><\/p>\n

8. <\/span>“Why slower but stubborn inflation keeps the Fed on track for rate hikes” The Hill, 14 Mar. 2023, https:\/\/thehill.com\/business\/3899251-consumer-prices-rose-6-percent-annually-in-february-as-inflation-eased\/<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. Consumer Price Index (CPI) rose 0.4% in February compared to the previous month, in line with expectations, while the core CPI, which strips out food and energy prices, rose 0.5%, higher than the 0.4% increase expected.[0]<\/a><\/sup> Year over year, costs climbed by 6%, a drop from January\u2019s 6.4%, and the smallest annual increase since September 2021.[1]<\/a><\/sup> <\/p>\n

The Federal Reserve began aggressively raising interest rates a year ago to tame inflation and have hiked rates by a cumulative 4.5% over the past year.[2]<\/a><\/sup> That has driven up mortgages and other borrowing costs, while also keeping home prices low.[1]<\/a><\/sup> Prices for food and shelter also increased in February, with the shelter index rising 0.8% over the month.[3]<\/a><\/sup> <\/p>\n

The Fed is likely to prioritize price stability over financial instability when it meets next week, with traders now pricing in a 85% chance that the Fed will increase the rate by a quarter point, according to a CME Group estimate.[4]<\/a><\/sup> Jeffrey Roach, chief economist for LPL Financial, made the case for a 0.25% rate increase later this month.[5]<\/a><\/sup><\/p>\n

However, recent bank failures and market volatility have complicated the picture. The medicine the Fed has taken to address financial system challenges, such as the Fed’s new bank lending facility and making all depositors whole, could help the Fed determine whether to press pause or continue raising rates.[6]<\/a><\/sup> <\/p>\n

Sarah House, senior economist at Wells Fargo Economics, believes that if the medicine proves effective, the Fed will continue to gradually tighten monetary policy in the months ahead.[7]<\/a><\/sup> <\/p>\n

Overall, the latest numbers are likely to keep the Fed\u2019s rate-setting committee on track to raise rates by 0.25 percentage points at its upcoming meeting March 21-22.[8]<\/a><\/sup> That could dial down the recent importance of the CPI and keep inflation under control.[6]<\/a><\/sup><\/p>\n

0. <\/span>“Stock market news today: Stocks, regional banks rally as CPI comes in as expected” Yahoo News, 14 Mar. 2023, https:\/\/news.yahoo.com\/stock-market-news-today-live-updates-march-14-2023-112356261.html<\/a><\/a><\/p>\n

1. <\/span>“The New Inflation Report Has Some Signs of Hope” The New Republic, 12 Mar. 2023, https:\/\/newrepublic.com\/post\/171130\/bls-inflation-report-march-2023<\/a><\/a><\/p>\n

2. <\/span>“March 13, 2023 Latest on the Silicon Valley Bank collapse” CNN, 13 Mar. 2023, https:\/\/www.cnn.com\/business\/live-news\/silicon-valley-bank-collapse-updates-03-13-23\/h_032ef854980c1aeac8c265af8b9fe711<\/a><\/a><\/p>\n

3. <\/span>“Consumer Price Index News Release – 2023 M02 Results” Bureau of Labor Statistics, 14 Dec. 2016, https:\/\/www.bls.gov\/news.release\/cpi.htm<\/a><\/a><\/p>\n

4. <\/span>“Banks will be OK. Inflation is still a nasty problem.” The Boston Globe, 14 Mar. 2023, https:\/\/www.bostonglobe.com\/2023\/03\/14\/business\/banks-will-be-ok-inflation-is-still-nasty-problem\/<\/a><\/a><\/p>\n

5. <\/span>“4 Experts Agree Following CPI Inflation Print: Housing Appears To Be Inflating Data, But The Fed Will Not” Benzinga, 14 Mar. 2023, https:\/\/www.benzinga.com\/news\/23\/03\/31344999\/4-experts-agree-following-cpi-inflation-print-housing-appears-to-be-inflating-data-but-the-fed-will<\/a><\/a><\/p>\n

6. <\/span>“Will the Fed keep raising interest rates? : The Indicator from Planet Money” NPR, 14 Mar. 2023, https:\/\/www.npr.org\/2023\/03\/14\/1163486839\/the-feds-new-dilemma-protect-banks-or-fight-inflation<\/a><\/a><\/p>\n

7. <\/span>“February CPI Report: What the Experts Are Saying About Inflation” Kiplinger’s Personal Finance, 14 Mar. 2023, https:\/\/www.kiplinger.com\/cpi-report-inflation-fed-rate-hikes-prices<\/a><\/a><\/p>\n

8. <\/span>“Why slower but stubborn inflation keeps the Fed on track for rate hikes” The Hill, 14 Mar. 2023, https:\/\/thehill.com\/business\/3899251-consumer-prices-rose-6-percent-annually-in-february-as-inflation-eased\/<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":2312,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2313"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=2313"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/2312"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=2313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=2313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=2313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}