Americans spent an average of 6 percent more on groceries, services or other living expenses in February. As a result, inflation has come down slightly compared to the previous month. The inflation rate was in line with the average expectations of economists.
In January, consumer prices were still up 6.4 percent on a year-over-year basis. Excluding volatile prices for food and fuel, prices rose an average of 5.5 percent, which was also in line with expectations. In January, this core inflation was still 5.6 percent.
According to figures from the US Bureau of Labor Statistics (BLS), between January and February, daily living in the US increased by 0.4 percent. Prices rose 0.5 percent between January and December.
Will US interest rates continue to rise?
Although inflation appears to be cooling, it is still above the US Federal Reserve’s target. It aims for an average inflation rate of 2 percent on an annual basis. The Federal Reserve has been trying to reduce inflation for some time by raising policy rates.
The central bank will announce a new interest rate decision next week. Financial markets believe that the central bank may avoid further rate hikes due to recent unrest in the banking sector due to the collapse of US Silicon Valley Bank (SVB), Signature Bank and crypto bank Silvergate Capital.
Financial analysts’ estimates of the Federal Reserve’s interest rate policy now vary widely. Some analysts expect the key rate to rise by 0.25 percent, but there are also analysts who think the central bank will leave rates unchanged.