WASHINGTON: The US Federal Reserve\u2019s preferred inflation measure logged a mild uptick Friday while spending weakened, triggering another tirade by President Donald Trump against the central bank chair for not cutting interest rates sooner.
\n\u201cWe have a guy that\u2019s just a stubborn mule and a stupid person,\u201d Trump told an event at the White House, referring to Fed Chair Jerome Powell. \u201cHe\u2019s making a mistake.\u201d
\nWith Powell\u2019s term as Fed chief coming to an end next year, Trump hinted at his choice of successor: \u201cI\u2019m going to put somebody that wants to cut rates.\u201d
\nThe president\u2019s remarks came after government data showed the personal consumption expenditures (PCE) price index climbing 2.3 percent last month from a year ago in May.
\nThis was in line with analyst expectations and a slight acceleration from April\u2019s 2.2 percent increase, but still a relatively mild uptick.
\nExcluding the volatile food and energy sectors, the PCE price index was up 2.7 percent, rising from April\u2019s 2.6 percent uptick, the Commerce Department\u2019s report showed.
\nBut consumer spending declined, after Trump\u2019s fresh tariffs in April dragged on consumer sentiment. PCE dropped by 0.1 percent from the preceding month, reversing an earlier rise.
\nWhile Trump has imposed sweeping tariffs on most US trading partners since returning to the White House in January \u2014 alongside higher rates on imports of steel, aluminum and autos \u2014 these have had a muted effect so far on inflation.
\nThis is in part because he held off or postponed some of his harshest salvos, while businesses are still running through inventory they stockpiled in anticipation of the levies.
\nBut central bank officials have not rushed to slash interest rates, saying they can afford to wait and learn more about the impact of Trump\u2019s recent duties. They expect to learn more about the tariffs\u2019 effects over the summer.<\/p>\n
\u201cThe experience of the limited range of tariffs introduced in 2018 suggests that pass-through to consumer prices is intense three-to-six months after their implementation,\u201d warned economists Samuel Tombs and Oliver Allen of Pantheon Macroeconomics in a note.
\nThey flagged weakness in consumer spending, in part due to a pullback in autos after buyers rushed to get ahead of levies.
\nAnd spending on services was tepid even after excluding volatile components, they said.
\n\u201cThere has also been a clear weakening in discretionary services spending, notably in travel and hospitality,\u201d said Michael Pearce, deputy chief US economist at Oxford Economics, in a note.
\nThis reflects \u201cthe chilling effect of the plunge in consumer sentiment,\u201d he added.
\nBetween April and May, the PCE price index was up 0.1 percent, the Commerce Department report showed.
\nAs a July deadline approaches for higher tariff rates to kick in on dozens of economies, all eyes are also on whether countries can reach lasting trade deals with Washington to ease the effects of tariffs.
\nFor now, despite the slowing in economic growth, Pearce said risks that inflation could increase will keep the Fed on hold with interest rates \u201cuntil much later in the year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
WASHINGTON: The US Federal Reserve\u2019s preferred inflation measure logged a mild uptick Friday while spending weakened, triggering another tirade by President Donald Trump against the central bank chair for not cutting interest rates sooner. \u201cWe have a guy that\u2019s just a stubborn mule and a stupid person,\u201d Trump told an event at the White House, …<\/p>\n","protected":false},"author":4,"featured_media":82981,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-82963","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world"],"_links":{"self":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/82963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/comments?post=82963"}],"version-history":[{"count":1,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/82963\/revisions"}],"predecessor-version":[{"id":82982,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/82963\/revisions\/82982"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media\/82981"}],"wp:attachment":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media?parent=82963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/categories?post=82963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/tags?post=82963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}