Case for Fed to hike rates in 2019 on modest consumer price increase
Excluding the volatile food and energy components, the CPI edged up 0.1% — the smallest increase since August 2018
Washington — US consumer prices rose for the first time in four months in February, but the pace of the increase was modest, resulting in the smallest annual gain in nearly 2½ years. The report from the labour department on Tuesday also showed benign underlying inflation in February, which together with slowing economic growth, support the Federal Reserve’s “patient” approach towards further interest rate increases in 2019. The consumer price index (CPI) increased 0.2%, lifted by gains in the costs of food, fuel and rents. The CPI had been unchanged for three straight months. In the 12 months through February, the CPI rose 1.5%, the smallest gain since September 2016. The CPI increased 1.6% on a year-on-year basis in January. Excluding the volatile food and energy components, the CPI edged up 0.1%, the smallest increase since August 2018. The core CPI had increased by 0.2% for five straight months. In the 12 months through February, the core CPI rose 2.1%. The core CPI had increased...
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