Is U.S. Inflation On the Way Down?

Market Questions is the FT’s guide to the week ahead

by Jennifer Hughes, Valentina Romei, and Mari Novik
FT

With jobs data this week suggesting the US economy is still robust, attention next week will turn to the Federal Reserve’s other big preoccupation: whether price pressures are easing.

January’s consumer price index data is due on Wednesday and is expected to show a slight slowing of the rate of price rises, though that is unlikely to be enough to rush the central bank into another interest rate cut.

The closely watched core inflation measure, which strips out volatile food and energy prices, is expected to come in at 0.3 per cent month on month, for a 3.1 per cent year on year rate, according to economists polled by Reuters, down from 3.2 per cent in December. The headline rate is forecast to remain at 2.9 per cent.

Last month the Fed left rates on hold and signalled it was in no hurry to ease further unless the data supported such a move.

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