US Inflation Set to Stay Sticky as Tariff Risk Looms
US consumer prices probably rose in February at a pace that illustrates plodding progress on inflation, with annual price growth elevated and lingering cost pressures expected to continue. The magnitude of the increase leaves room for concern among Federal Reserve officials, who have an inflation goal of 2% and are keenly monitoring policy developments from the Trump administration. However, moderate economic growth and steady payrolls growth tempered by hints of underlying cracks in the labor market are also contributing to a more nuanced view on inflation.
- The persistence of sticky inflation may necessitate a reevaluation of monetary policy frameworks that prioritize wage growth over price stability, particularly if supply chains remain vulnerable to global risks.
- How will the evolving dynamics between inflation expectations and actual price growth influence policymakers' decisions at the Federal Reserve's March 18-19 policy meeting?