Point of View: Inflation is unlikely to decrease enough to prompt the Federal Reserve to cut interest rates this year

On March 14th, several economists on Wall Street have expressed that policymakers are not likely to be overly reassured by these numbers. This is because of the complex calculation method behind the data and the trends in key areas. Stephen Juneau, an economist at Bank of America, stated in a report, "In short, the inflation process in 2025 did not start smoothly. Our forecast for Personal Consumption Expenditures (PCE) inflation further confirms our view that inflation is unlikely to decline sufficiently to justify a rate cut by the Fed this year. Especially in a policy environment that is pushing inflation higher. Unless economic activity data weakens significantly, we believe that policy rates will remain unchanged by the end of the year." Although the Fed also monitors CPI and PPI, it believes that the final say on inflation belongs to the PCE Price Index. Most economists believe that the latest PCE data to be released later this month will show that the year-on-year inflation rate is at best stable at 2.6%, or may even increase slightly, further moving away from the Fed's 2% target. (Jinse)