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Why is the Fed still so cautious about interest rates?

Jun 13, 2024
Despite the CPI coming in unexpectedly low, the Federal Reserve needs more convincing that inflation is really getting better.
"Consumers change their buying habits, they move from steak to chicken, from the upper shelf down to the lower shelf," said Dan North with Allianz Trade about inflation.
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In April, grocery store prices were flat — or even lower

May 15, 2024
Consumers tend to be very sensitive to food costs. Fresh edibles like fruit, vegetables and meat saw substantial declines.
The prices of fresh food like fruit, vegetables and meat saw some of the biggest decreases.
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Why isn't the cost of borrowing money included in the consumer price index?

May 15, 2024
Loans are a big cost, but they would muddle the data in the CPI. Fed rate hikes would essentially create inflation, despite their intention.
Borrowing is a major expense for many Americans. One example is the interest on car loans.
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The federal government's inflation measures can feel ... wrong. How accurate are they?

Apr 30, 2024
CPI and PCE can both seem to be out of step with consumers' experience.
The CPI and PCE each have their own basket of goods and services they keep an eye on to determine how inflation is doing.
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Electricity bills could hit your pocketbook even more this summer

Apr 10, 2024
The Energy Information Association expects electricity demand to rise by 4% this summer, anticipating that it’ll be even hotter than last year.
The EIA expects electricity demand to rise by 4% this summer, anticipating that it’ll be even hotter than last year. Many people will likely be running their ACs more to cope with the heat.
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Import prices rose more slowly in February. That could help bring down inflation.

Mar 15, 2024
The Labor Department reported that the price of imported goods rose 0.3% in February compared to 0.8% the month before.
Prices at the import level can affect prices that show up in other inflation data.
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Inflation falls, but not as much as expected

Feb 13, 2024
The CPI rose 3.1% in January compared to a year ago.
A major factor in core inflation is shelter costs. But the way the CPI calculates rent lags a bit behind current rent prices.
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For public good, not for profit.

When an item costs more but you still need it? That's "inelastic demand."

Feb 13, 2024
Despite inflation, people still buy as much food, medicine, gasoline — even coffee.
The price of baby food and formula is up 8.7% year over year, according to the latest CPI.
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How are health insurance costs reflected in inflation calculations?

Nov 13, 2023
To make the CPI’s health care component more accurate, the Bureau of Labor Statistics changed how it uses health insurance data.
Rather than tracking health insurance premiums, the BLS tracks how much health insurance companies retain of the premiums they receive after paying for services.
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What’s the difference between CPI and PCE?

Oct 27, 2023
The consumer price index and the personal consumption expenditures price index measure the changing cost of different baskets of goods.
Housing is a bigger part of the CPI than the PCE, and the increase in housing costs has pushed the CPI higher.
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