A fresh reading on U.S. inflation showed it eased in February on a month-over-month basis, putting less pressure on the Federal Reserve to keep interest rates elevated, according to LPL Financial’s chief economist Jeffrey Roach.
“February’s core deflator, the Fed’s preferred inflation gauge, decelerated to 0.3% month to month from 0.5% in January,” Roach said in emailed comments Friday. “This is overall good news for markets.”
Roach was referring to core data from the personal-consumption-expenditures price index that the Bureau of Economic Analysis released on Friday. So-called core inflation excludes food and energy prices.
“Core services inflation is slowing and will likely continue throughout the year,” said Roach. “By the time the Fed meets in June,” Roach anticipates “the data should be convincing enough” for the central bank to begin its “rate normalization process.”