Fed Inflation Debate Shifts to How Far Goods Prices Can Drop
- Powell says ‘we could get more’ while others aren’t so sure
- Trajectory depends in part on prices of used cars, apparel
A clothing store in New York.
Photographer: Bing Guan/BloombergThis article is for subscribers only.
As Federal Reserve officials stare down the last mile in their campaign against inflation, one key question is becoming increasingly central to the debate: Will goods prices continue to fall?
Lower prices for everything from apparel to used cars were a major driver of the faster-than-expected downdraft in inflation in the second half of 2023, and a slower pace of price declines since then has contributed to higher readings so far over the first several months of 2024.