Inflation & Prices
What Went Wrong With US Inflation
- Fed chair ignited rally by signaling rate cuts in December
- Housing, insurance, commodity prices among contributors
A customer places items on a conveyor belt at a checkout counter in Salt Lake City, Utah.
Photographer: George Frey/BloombergThis article is for subscribers only.
This was supposed to be the year that US inflation rode the last mile down to 2%, letting the Federal Reserve steadily reduce interest rates from a two-decade high. Now those expectations have been dashed.
Price gains have proven much stickier than anticipated a few months into 2024 amid a resilient economy and labor market. On Tuesday, Fed Chair Jerome Powell said persistent inflation means borrowing costs will stay elevated for longer than previously thought, a shift in tone with ramifications for policy around the world.