FILE - Federal Reserve Board Chair Jerome Powell speaks during his appearance before the House Financial Services Committee on Capitol Hill, March 6, 2024, in Washington. The Federal Reserve is set this week to leave interest rates unchanged for a fifth straight time.
Excluding volatile food and energy costs, so-called “core” prices rose at a monthly pace of 0.4% in both January and February, a pace far higher than is consistent with the Fed’s inflation target. Compared with a year earlier, core prices rose 3.8% in February. Core prices are considered a signal of where inflation is likely headed.
Indeed, several Fed officials have said in recent speeches that they expect inflation to keep declining this year, though likely more slowly than in 2023. The Fed’s benchmark rate stands at about 5.4%, the highest level in 23 years, after a series of 11 rate hikes that were intended to curb the worst inflation in four decades but have also made borrowing much more expensive for consumers and businesses.