US consumer sentiment continues to brighten
The mood barometer rose slightly from 79 to 79.6 points. Experts expect more increases.
Consumers expect the inflation rate for goods and services to be 3% over the next twelve months.
Image: Hannah Beier/Bloomberg
US consumer sentiment improved slightly in February. The barometer rose to 79.6 from 79.0, the University of Michigan reported on Friday based on its monthly survey. Experts polled by Reuters had expected a strong increase to 80.0 points, after mood was noticeably brighter at the start of the year. Consumers rated their situation somewhat worse in February, but had a better outlook than before.
US consumers face rising inflation, which is gradually easing: the inflation rate fell to 3.1% in January and is still above the central bank's stability target of 2%.
Consumers' inflation expectations have now increased slightly: looking ahead to the next twelve months, they expect the inflation rate for goods and services to be 3.0%. In January, consumers estimated 2.9%.
The Federal Reserve is trying to push inflation toward its target of 2% with tighter monetary policy. It has raised interest rates from near zero to 5.25 to 5.50% from early 2022. According to Fed Chairman Jerome Powell, the central bank has made progress in fighting inflation. However, before cutting interest rates, it must be certain that inflation is moving steadily toward the central bank's target.
An interest rate reversal in financial markets is not expected until mid-year. Producer prices, an early signal of rising inflation, rose more than expected at the start of the year. From the perspective of financial markets, this also speaks against an early interest rate cut.
Reuters
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