U.S. inflation continued to outpace expectations in February as prices on consumer goods and services inched up .4% from the previous month and 3.2% from the same time last year, according to a federal report released Tuesday. The main culprits behind the uptick, according to Labor Department’s Consumer Price Index Summary for February, are energy prices and the cost of shelter. Changes in the cost of shelter have an outsize impact on the consumer price index as the metric accounts for about one-third of the overall rate.
Federal Reserve officials are keen to start debating their balance sheet run-down endgame, but benign market conditions, recent central banker comments and bond dealer estimates now suggest the process may run longer than previously thought. One factor driving the rethink is a puzzling bout of better-than-expected liquidity conditions in U.S. short-term financing markets that has for now at least forestalled a run of volatility that some on Wall Street had expected to force the Fed's hand into stopping the balance sheet shrinkage effort known as quantitative tightening. On top of that, minutes of the Fed's most recent meeting in January showed some policymakers interested in an extended slowdown in the pace of shrinkage - a tapering - that could actually allow QT to proceed for a longer period.
Credit for the market s extraordinarily strong week for stocks goes to the world s leading AI stock, writes Bill Schmick. Nvidia s corporate earnings and sales not only fulfilled the hopes of