Moderate Inflation Easing Keeps Fed's Interest Rate Cuts on Hold

The slow pace of inflation decline in the US last month, paired with a rebound in retail sales, suggests the Federal Reserve may maintain its current stance on interest rates without immediate cuts. The core consumer price index (CPI), which provides a clearer view of underlying inflation by excluding volatile items like food and fuel, is expected to have increased by 0.3% in February, following a 0.4% rise at the beginning of the year. This measured retreat in inflation and positive retail activity highlight the reasons behind the Fed’s cautious approach to altering interest rates.