Fed Remains Cautious on Rate Cuts Despite Slight Easing in January Inflation
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Economists expect core PCE inflation to come in at 2.8% year-over-year for January, slightly down from 2.9% in December but with a higher 0.4% month-over-month increase.
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Hotter inflation readings have led some Fed officials to describe the path down to 2% as "bumpy", raising questions about the pace of future rate cuts.
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Several Fed officials cited recent data as evidence there is no rush to cut rates and emphasized inflation is not yet fully under control.
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Kansas City Fed President Jeff Schmid said service price inflation remains high amid a tight job market and wage growth.
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Economists believe hotter January inflation data is already embedded in policymakers' cautious rate cut views, with cuts still on track for June.