Inflation in US eases, Fed likely to maintain interest rates unchanged
Date
7/27/2024 1:15:38 PM
(MENAFN) A report released on Friday indicates that while inflation in the United States is slowing, it is not yet sufficient for the Federal Reserve to consider lowering interest rates in the upcoming meeting. Dana Peterson, chief economist at The Conference Board, noted that the Personal Consumption Expenditure (PCE) price index continued to decelerate in June 2024. This trend is bringing the Fed closer to a level of confidence that inflation may be approaching its 2-percent target.
Peterson highlighted that shelter costs, which have been a significant driver of year-over-year inflation, are beginning to slow down. Despite this progress, she pointed out that core services prices remain persistently high, which is impeding further advances toward the inflation target. This persistent issue in core services prices is complicating the overall inflation reduction efforts.
Peterson also noted that real consumer spending showed signs of weakening in June, indicating reduced momentum as the economy moved into the third quarter. Furthermore, she observed that consumers are increasingly prioritizing spending on essential services over discretionary purchases, reflecting a shift in consumer behavior amid the evolving economic conditions.
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