Core PCE price index ran up at a 3.7% annualized rate in the first quarter
Federal Reserve is expected to maintain higher-for-longer stance on interest rates
Investors have scaled back bets on pre-election rate cut due to persistent underlying inflation and enduring strength in the labor market
Latest price data shows that inflation remains stubborn
The Federal Reserve's rate-cut debate is shifting from when to if, as policymakers are widely expected to hold rates steady at their meeting on April 30-May 1. Jerome Powell, the Fed chair, has signaled that economic growth remains solid and inflation is starting to turn higher. The core PCE price index ran up at a 3.7% annualized rate in the first quarter, making a July rate cut increasingly unlikely.
Despite this, investors have scaled back their bets on a pre-election rate cut due to persistent underlying inflation and enduring strength in the labor market. The latest price data shows that inflation remains stubborn, and economists expect a robust employment report on Friday.
Powell will address reporters after the Fed's rate decision on Wednesday, offering signals on when rate cuts could take place. However, expectations for rate reductions have been pushed further into 2024.
The Federal Reserve is expected to maintain its higher-for-longer stance on interest rates. The latest data suggests that inflation remains a concern and the labor market remains strong, making it unlikely that the Fed will make any significant moves on interest rates in the near future.
Federal Reserve Chair Jerome Powell is expected to maintain the higher-for-longer stance on interest rates.
Expectations for rate reductions have been pushed further into 2024.
Accuracy
]The latest price data shows persistent underlying inflation.[
The Fed's rate decision is expected to hold borrowing costs at a more than two-decade high.
Deception
(50%)
The article contains selective reporting as it only reports details that support the authors' position of Powell keeping interest rates high for longer. It also uses editorializing language such as 'Most Read from Bloomberg' and 'For full analysis, click here'. The authors make no attempt to hide their bias towards the Fed raising interest rates.
