Moderation In US Consumer Inflation Continues

Moderation In US Consumer Inflation Continues

Consumer inflation in the US moderated in February to 6.0 per cent from 6.4 per cent the previous month, but still the numbers are way above the 2 per cent target.

It was at 6.5 per cent in December, and 7.1 per cent the month before. The US central bank’s policy rate is now in a target range of 4.50-4.75 per cent, the highest level in 15 years, and notably, it was near zero in the early part of 2022.

Raising interest rates typically help in cooling demand in the economy and thus help in managing inflation.

Despite inflation moderating in recent months, the process of getting it back down to two per cent is still a long way away and the path is likely to be bumpy, said US Federal Reserve Chair Jerome Powell earlier this month.

At the latest monetary policy meeting, a few participants too favored raising the target range for the federal funds rate by 50 basis points, noting that a larger increase would more quickly help in achieving price stability, Minutes of the latest monetary policy meeting of the US Federal Reserve showed.


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