U.S. consumer spending barely rose in February and inflation retreated, suggesting the Federal Reserve could remain cautious about raising interest rates this year even as the labor market rapidly tightens.
Federal Reserve policymakers urging caution over interest rate hikes have gained the upper hand in the central bank's internal debate, but the risk for the U.S. economy is that they are wrong to downplay a recent rise in inflation.
The Federal Reserve won't raise interest rates this week, but will likely make clear that as long as U.S. inflation and jobs continue to strengthen, economic weakness overseas won't stop rates from rising fairly soon.
The Fed is stuck in between a hard place and a grenade, given this option, they will choose the hard place as unless you are looking for a one-way to ticket to nowhere you won’t choose the grenade. The Fed has nowhere to go; there is only one option available inflate the money supply or die trying to.
U.S. economic activity continued to expand in most districts from early January to late February but conditions varied considerably across regions and within sectors, the Federal Reserve said on Wednesday.
Global business growth slowed last month as services from Asia to Europe reported waning demand and little or no inflationary pressure, suggesting more central bank stimulus may be needed, surveys showed.
The dollar will appreciate against major currencies in the coming months, a Reuters poll found, but not enough to make up for the losses incurred just before and since the Federal Reserve raised interest rates in December.
An influential Federal Reserve official on Tuesday said he sees downside risks to his U.S. economic outlook, an assessment that could flag a longer pause before the Fed's next interest-rate hike than he and his colleagues had earlier signaled.