CPI Data Could Temper Any Rate Hikes, Says NAFCU Economist

consumer prices

ARLINGTON, Va.—On a seasonally adjusted basis, overall consumer prices increased 0.2% in February. According to data recently published by the Bureau of Labor Statistics, the overall CPI stayed at 1.5% over the 12-month period.

NAFCU Chief Economist and Vice President of Research Curt Long said the report indicates the Federal Reserve may hold off on future rate hikes.

"Stripping out that volatile element, core prices have hovered just above 2% for the past year,” Long said in a NAFCU Macro Data Flash report. "Meanwhile, the Fed's preferred measure for inflation – the personal consumption expenditures index – rose just 1.7% on its last reading. That is comfortably below the Fed's 2% target and affords plenty of room to hold off on rate hikes for the time being.

"A rate increase in the first half of 2019 is nearly out of the question, and it is becoming less likely that one will occur at all this year," Long added.

Core prices (excluding food and energy costs) increased 0.1% in February compared to the previous month. Year-over-year core CPI growth remained at 2.1%.

Energy prices increased 0.4% in February following a 3.1% decrease in January. From a year ago, energy prices were down 5.1%. Food prices rose 0.4% in February; on a year-over-year basis, food prices were up 2%.

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Copyright Year: 2019
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