On February 21st, economists predict that the inflation indicator favored by the Federal Reserve will accelerate its rise in the short term, prompting policymakers to maintain high interest rates for a longer period of time. According to Bloomberg’s latest survey of economists, the core personal consumption expenditure (PCE) price index, excluding volatile food and energy categories, is expected to increase by 2.6% in the first quarter, higher than last month’s expectation of 2.5%. Economists also expect the overall PCE and consumer price index to accelerate this year. Therefore, forecasters now believe that Fed officials will not cut interest rates again until July, while the last survey predicted a rate cut in May. The minutes of the Federal Reserve’s January meeting released earlier this week showed that officials are inclined to keep interest rates unchanged amid stubborn inflation and uncertain economic policies of the Trump administration.
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