Inflation proving stickier than expected has dashed hopes for quick Fed rate cuts

Inflation isn’t moving down as quickly as the Federal Reserve hoped, forcing investors to dig in for a longer wait for the central bank to begin cutting interest rates.

Two inflation reports this week undercut the notion that the Fed will begin its pivot to rate cuts sooner rather than later. The data show that inflation is proving harder than expected to vanquish, which means monetary policy will likely end up being tighter for longer.

The first report, the closely watched consumer price index, indicated that inflation fell two-tenths of a percentage point to 3.1% for the year ending in January. While that is a decline, most economists thought it would fall even more. On a monthly basis, the pace of inflation actually increased to 0.3%, a reading that is
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