CPI sees growth; no rate changes expected
On a seasonally adjusted basis, overall consumer prices increased 0.2 percent in December following a 0.3 percent rise in November. NAFCU’s Curt Long, in a new Macro Data Flash report, attributed the growth mainly to increased energy, medical care, and shelter prices.
“Energy is up 3.5 percent to its year-ago level, and has continued a rise for two consecutive months,” said Long, NAFCU’s chief economist and vice president of research. “Used car prices fell 0.8 percent in December, but this could be partly due to a new methodology for calculating the index.
“The Federal Reserve’s preferred measure of inflation grew by just 1.6 percent for the 12 months through November, well below the FOMC’s 2-percent target. That accounts for the broad agreement to hold off on rate hikes until clear signs emerge of above-target inflation,” he concluded.
The FOMC is set to hold its first meeting of 2020 Jan. 28-29. The committee cut rates three times last year before holding the target rate range at 1.5 percent to 1.75 percent at the conclusion of its December meeting.
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