Inflation Lab
A rate cut next week has been off the table for a while, but this week’s unexpectedly hot inflation data will shape the Fed’s press conference and Summary of Economic Projections next Wednesday. The trend for core CPI inflation has accelerated since last September, particularly centered on core service prices. Because we’ve seen high core CPI inflation run parallel with much better PCE inflation in the last couple of years, the worrisome CPI data do not necessarily preclude the Fed from cutting rates in the second quarter.
