The January inflation data in the US is not totally reassuring for the Fed. While goods prices continue to slow down, core services inflation is picking up, notably in Shelters, Medical care, and Education & Communication.
”The surprise in US services inflation suggests the Fed may be more cautious before starting to cut rates.”
- The January inflation data showed a broad-based reacceleration of services prices.
- While the slowdown in inflation should continue, reaching the 2% target may take more time.
- A key implication is that the Fed may wait slightly longer before cutting rates.
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