Federal Reserve’s Preferred Inflation Gauge Drops Below 3%
Last month, the U.S. Federal Reserve’s preferred inflation gauge slowed to 2.9%, the lowest level in nearly three years. This comes at a time when consumer spending has been raising concerns that inflation may not be dropping as fast as expected. The Bureau of Economic Analysis reported that its PCE Price Index, which tracks core prices, dropped to 2.9% last month, marking the lowest reading since March 2021.
Markets closely monitor the core PCE price index by the Federal Reserve as it reflects consumer-price changes, incorporating shifts in spending habits, and the overall PCE index remained at 2.6%, matching Wall Street expectations. Next Moves for the Federal Reserve; May cut is estimated
CME Group’s FedWatch tool anticipates no rate changes at the Fed’s policy meeting next Wednesday but estimates about a 92% likelihood of a cut in May. Nevertheless, the U.S. national debt remains a major concern for investors. Analysts have suggested the country may be facing a “debt death spiral” as its total reaches $34 trillion after rising by over $82 billion in a month.
Analysts Suggest Why US National Debt at $34 Trillion is Concerning
Analysts from Jefferies have cautioned that the Federal Reserve may have to resume its money printing, which may cause the U.S. dollar to crash and boost the price of Bitcoin as it competes with gold. In a recent note to clients, Christopher Wood, global head of equity strategy at Jeffries, called Bitcoin and gold “critical hedges” against the return of inflation.
Federal Reserve’s Preferred Inflation Gauge Dropping Below 3%
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