Inflation Data Gives Fed Time to Wait on Rate Hike Decision
The Federal Reserve's interest rate hike prospects have gained momentum after new inflation data was released on Wednesday.
The Commerce Department reported that the 12-month gain in the personal consumption expenditures price index, which the Fed targets at 2%, edged up to 3.7% last month from 3.6% in the prior month.
This slight increase has given Federal Reserve Chairman Kevin Warsh some breathing room, as he has not yet indicated whether he believes inflation will recede without interest-rate hikes.
Heather Long, chief economist at Navy Federal Credit Union, stated, 'The United States still has an inflation problem. The latest data give (Warsh) time to wait and see, but he has to be more clear about what he's watching closely and what it would take for him to hike rates.'