Federal Reserve: Fed-favoured inflation gauge seen rising most in a year

Underlying US inflation probably rose in January by the most in a year, as tracked by the Federal Reserve’s preferred metric, highlighting the long and bumpy path to taming price pressures. The core personal consumption expenditures price index, which excludes food and energy costs, is seen rising 0.4% from a month earlier. That would mark the second straight monthly of acceleration in a gauge that’s largely been receding over the past two years.

And when annualizing the data on a three- or six-month basis, both would rebound above 2% after dipping below the Fed’s target in December.

Fed officials have stressed they’re in no rush to lower borrowing costs and will only do so once they’re confident that inflation is retreating on a sustained basis. The PCE data will likely validate that stance and possibly further diminish market expectations for an interest-rate cut in the coming months.

Also due are the US government’s second estimate of fourth-quarter growth, durable goods orders, and the Institute of Supply Management’s manufacturing gauge for February. January figures for new- and pending-home sales will give the latest readout on the housing market.

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