U.S. Inflation Supports Fed's Promise of Patience

U.S. Inflation Supports Fed's Promise of Patience

Investing.com  | Jan 11, 2019 08:57AM ET

U.S. Inflation Supports Fed's Promise of Patience

Investing.com - U.S. consumer prices rose in line with expectations in December, underlining the case for the Federal Reserve to keep its current policy outlook stable.

The consumer price index rose 1.9% from a year ago, while core inflation, that excludes volatile food and energy costs, increased 2.2%.

Both readings matched the reading in the prior month and were in line with consensus forecasts.

Markets showed little reaction to the data with U.S. stock futures and the U.S. dollar holding lower, while the yield on the 10-year Treasury fell and gold maintained gains.

"Such data are not expected to alter the Fed's reaction function," Allianz chief economic adviser Mohamed El-Erian explained after the report.

The Fed usually tries to aim for 2% core inflation or less.

Fed chairman Jerome Powell made remarks Thursday that served as another sign that policymakers are in no hurry to hike rates as they look to have a better handle on whether slowing global growth and financial market volatility will negatively impact the U.S. economy.

“Especially with inflation low and under control we have the ability to be patient and watch patiently and carefully as we ... figure out which of these two narratives is going to be the story of 2019,” Powell said.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (UK) English (India) English (Canada) English (Australia) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+