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February's US inflation tops forecast

Resilient inflation could yet dampen hopes for three rate cuts by the Fed this year.

12 March 2024

US inflation data for February rose to 3.2% year-on-year, versus forecasts of 3.1%. Core CPI came in at 3.8%, again 0.1% higher than expected as a result of higher prices seen in shelter (housing), motor insurance premiums, clothing and recreational activities. This last mile of dis-inflation that the Federal Reserve (Fed) is travelling, or should that be travailing, is getting just a little bit bumpier. The rates outlook may be tempered from the three cuts currently expected pre this inflation print but it was always going to be the case of the Fed holding ‘higher for longer’, in our opinion, and this hotter-than-expected inflation report only justifies this.

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