The slow decline in inflation in the United States helps to keep the Fed's rate at a high level

Recently, consumer price inflation in the United States has begun to slow down, but this is happening at an extremely moderate pace. At the same time, the retail sales market is showing signs of recovery, which is the reason for the Federal Reserve System (Fed) not to rush to lower the interest rate. 

According to forecasts, the core consumer price index (CPI), excluding fluctuating food and energy costs, will grow by 0.3% in February compared to the previous month, after an increase of 0.4% a month earlier. An annual growth rate of 3.7% is expected, which is significantly lower than the maximum of 6.6% reached in 2022.

In a recent speech to Congress, Fed Chairman Jerome Powell said that despite a possible interest rate cut this year, he and his colleagues do not yet consider it appropriate. He stressed that it is important to first see convincing evidence that inflation is approaching the 2% target, based on the Personal Consumption Expenditure (PCE) price index. 

The producer price index expected on Thursday will provide additional data for the PCE analysis, the results of which will be published after the Fed meeting on March 19-20.

Despite inflation exceeding the Fed's target, the overall economic situation in the United States shows no signs of crisis. In addition, there is a steady increase in employment, which is expected to help maintain the level of consumer spending.