Inflation & Prices
Fed’s Preferred Inflation Gauge Accelerates, Adding Pressure for More Rate Hikes
- Fed’s preferred price index rose 5.4% in January, core up 4.7%
- Inflation-adjusted consumer spending increased most since 2021
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The Federal Reserve’s preferred inflation gauges unexpectedly accelerated in January and consumer spending surged after a year-end slump, adding pressure on policymakers to keep ratcheting up interest rates.
The personal consumption expenditures price index rose 5.4% from a year earlier and the core metric was up 4.7%, both marking pickups after several months of declines. Consumer spending, adjusted for prices, jumped 1.1% from the prior month, the most in nearly two years, after consecutive declines.