Inflation may have cooled in May, but Federal Reserve is seeking sustained improvement

A shopper pauses at a display in a furniture store Sunday, June 2, 2024, in Englewood, Colo. On Wednesday, June 12, 2024, the Labor Department issues its report on prices at the consumer level in May. Customers queue up to order at an In-N-Out restaurant Sunday, June 2, 2024, in Lone Tree, Colo. On Wednesday, June 12, 2024, the Labor Department issues its report on prices at the consumer level in May.

The Fed is closely monitoring each month’s inflation report for signs that it’s succeeding in its fight against rising prices. A rise in core consumer prices of 0.3% is too high, over time, to be consistent with the central bank’s 2% annual inflation target and could be seen as a disappointment. Still, the Fed’s officials prefer a separate inflation measure, which typically comes in slightly lower than Wednesday’s consumer price index.

The longer the Fed keeps borrowing costs high, the more it risks weakening the economy too much and potentially causing a recession. Yet if it cuts rates too soon, it risks reigniting inflation. Most of the policymakers have said they think their rate policies are slowing growth and should curb inflation over time.

Energy Energy Latest News, Energy Energy Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Federal Reserve's preferred inflation gauge eased last month for the first time in 2024A price gauge closely tracked by the Federal Reserve cooled slightly last month, a sign that inflation may be easing after running high in the first three months of this year. Friday’s report from the Commerce Department showed that prices, excluding the volatile food and energy categories, rose 0.2% from March to April, down from 0.
Source: AP - 🏆 728. / 51 Read more »