Inflation at its lowest for a year and a half in the United States
Inflation peaked at 9.1% in June in the United States.
Inflation continues to slow in the United States, and fell in February to its lowest level for almost a year and a half, but the Fed, responsible for combating this price increase, is now under pressure with the bankruptcy of the SVB bank .
Consumer price inflation came in at 6.0% year on year in February, as expected, from 6.4% in January, according to the CPI index released Tuesday by the Labor Department.
This is its lowest level since September 2021, and its eighth month of slowdown in a row, after peaking at 9.1% in June .
Over one month alone, inflation also slowed, to 0.4% from 0.5%, again in line with analysts' expectations, after recording a rebound in January.
CPI inflation rose as expected, but core inflation came in stronger than expected, commented Rubeela Farooqi, economist for HFE.
Indeed, so-called core inflation, which excludes food and energy prices, rose again over one month, to 0.5% against 0, 4%. Year on year, however, it slowed to 5.5%, its lowest level since December 2021.
Housing prices are the ones that continue to climb the most, accounting for more than 70% of the increase over one month, details the Department of Labor in its press release.
L& #x27;food, leisure and furniture also contribute to this still strong inflation.
Good news however, energy prices, which had spiked in the spring of 2022 due to the war in Ukraine, continue to decline, and are down 0.6% compared to January, but up 5%. .2% over one year.
The US central bank (the Fed) is responsible for curbing this inflation, which, despite this new slowdown, remains very high .
The Fed favors another measure of inflation, the PCE index, which it wants to bring back to around 2%, but had gone back to the bottom. up in January, to 5.4% year-on-year.
Its main tool is to raise its rates, which increases the cost of credit, in order to encourage households to consume less. This should, ultimately, relieve pressure on prices.
Fed Chairman Jerome Powell warned just a week ago that the institution could tighten its monetary policy more than expected, due to this excessively high inflation, driven by unabated consumption and a still tight job market with a persistent lack of workers.< /p>
But the bankruptcy of the Californian bank Silicon Valley Bank and the turbulence in the banking sector, caused in part by the sharp rate hikes decided by the Fed over the past year, could change the situation.
Markets were expecting the Fed to decide, at its next meeting on March 21-22, on a sharp hike in rates, of half a percentage point, starting again even up from the previous meeting.
They wouldn't be surprised now if the Fed finally decides not to raise its key interest rate at all.
< p class="e-p">The inflation figures argue, according to Rubeela Farooqi, for a modest rate hike of a quarter of a percentage point, as at the previous meeting.
However, the decision will ultimately depend not only on economic data, but also on financial stability concerns, she said. ized.