Inflation continues to be the main pending issue for the US economy.
With growth higher than expected, strong job creation, an unemployment rate that has been below 4% for a record time and strong levels of investment, price stability is resisting.
Figures published this Tuesday by the Bureau of Labor Statistics, dependent on the Department of Labor, show that prices rose 3.2% in the last 12 months, compared to 3.1% in January.
Core inflation has eased somewhat, to 3.8%, but both figures are still well above the price stability objective of 2%, which complicates the start of interest rate cuts.
Economists' forecasts pointed to a monthly inflation of 0.4%, which has been fulfilled, but they pointed to an interannual rate of 3.1%, the same as in January, and an underlying inflation of 3.7%, compared to 3. .9% from last month.
In both cases, the rate has been one tenth higher than expected, something that investors have not liked.
The housing index (very dependent on rents) rose in February, as did the gasoline index.
Between them, they contributed more than 60% of the monthly increase in the index of all articles.
The food index remained unchanged thanks to the stabilization of food for consumption at home and despite the 0.1% increase in food outside the home.
Economists and politicians are simultaneously closely watching the evolution of prices.
Among economists, the president of the Federal Reserve, Jerome Powell, is reluctant to set dates for rate cuts until he has greater confidence that inflation is under control.
Among politicians, the president of the United States, Joe Biden, has seen how inflation eclipses the economic achievements of his mandate and, together with other factors (especially age), complicates his re-election.
The Federal Reserve Open Market Committee (FOMC), in charge of monetary policy, meets next week.
With inflation at these levels, it is assumed that interest rates will remain at the current level of 5.25%-5.5%, their highest in 23 years, in force since last July.
The chances that the first reduction in the price of money would arrive in March faded after the first FOMC meeting of this year, last January.
Investors are now looking further afield.
The forecasts of the committee members themselves, updated in December, pointed to a reduction of 0.75 points during this year until the end of the year, although without revealing when and at what pace.
FOMC members will publish their new forecasts next Wednesday.
The latest data on the labor market and prices still allow most of the market to bet on three quarter-point reductions, one each quarter, starting in June.
However, Powell has insisted time and again that there is no predetermined plan and that his decisions will depend on the data that is published.
In his double appearance in Congress last week, Powell avoided setting dates for rate cuts.
In an election year, the actions of the Federal Reserve will be closely examined.
Although President Biden has been respectful of the role of the monetary authority, Democrats have begun to urge Powell to lower the price of money, which makes access to housing difficult.
On the other side, the Republicans, led by Donald Trump, have raised unfounded suspicions about Powell's alleged interest in lowering rates to favor Biden's re-election.
It is difficult for the isolated inflation data in February to mark the evolution of monetary policy, but it can help to avoid bets on a reduction in the meeting of April 30 and May 1.
For that date, only one more inflation data will be known, that corresponding to March.
Therefore, the majority of the market believes that we will have to wait until June 12.
Then the data for April and May will be known, which is published that same day.
There the central bank will be able to decide if it has enough confidence that the risk of a rebound in inflation is sufficiently contained to lower the price of money for the first time since the start of the pandemic, in March 2020.
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