U.S. consumers flush with the COVID pandemic aid payments that flowed from the government in 2020 and 2021 flocked to auto lots and drove vehicle prices to sky-high levels.
Many economists expect the pace of increases in shelter costs to slow and pull down headline inflation this year. Despite the slow progress in January's CPI report, financial markets largely left their view of upcoming Fed policy moves intact, with the 2-year Treasury yield little changed and investors expecting two more quarter-percentage-point rate increases at the Fed's meetings in March and May.
As the U.S. central bank plots its next moves in the battle against inflation, the behavior of businesses in the services sector - from hair salons to airlines, restaurants and financial planners - are now "really kind of the wild card" Robert Rich, a senior economic and policy advisor at the Cleveland Fed and director of its Center for Inflation Research, said at an event on Monday.
At a Feb. 1 news conference following the end of the central bank's latest policy meeting, Fed Chair Jerome Powell noted his concern that "disinflation" had yet to take hold in much of the services sector. Personal consumption expenditures data as of December showed that services outside of energy and housing were contributing about 1.9 percentage points on an annualized basis to headline PCE inflation, nearly consuming all of the Fed's target inflation rate even if all other prices were steady. While that is down from nearly 3 percentage points in August, it represented an increase over the prior month.
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed looks to services prices as last leg in inflation fightU.S. consumers flush with the COVID pandemic aid payments that flowed from the government in 2020 and 2021 flocked to auto lots and drove vehicle prices to sky-high levels.
Read more »
2021 Toyota RAV4 Prime recalled for potential stalling in cold weatherToyota's recalling the 2021 RAV4 Prime over a software issue that could cause the crossover to stall in cold weather when driven in EV mode.
Read more »
Atlanta judge orders partial release of Trump 2020 election investigation reportThe report's recommendations are expected to influence Fulton District Attorney Fani Willis' decision.
Read more »
Get lifetime access to Microsoft Office 2021: Mac for $40.99, Windows for $67.99Don\u0027t miss this exclusive deal on Microsoft Office\u0027s full suite of applications and tools
Read more »
Judge orders partial release of Georgia grand jury report on possible 2020 election crimesThe release will include a special grand jury’s report that focuses on whether former President Trump broke state law by pressuring local officials to change the 2020 presidential election results.
Read more »
Gun used in 2021 shooting among 10 firearms found during search of Jacksonville Beach homeUPDATE: Jacksonville Sheriff T.K. Waters on Monday announced the arrests of four people accused of various gun crimes.
Read more »