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US Inflation Pushing Higher

US Inflation Pushing HigherUS Inflation Pushing Higher

Underlying US inflation increased more than expected in February as rents and medical costs maintained their upward trend, which could keep the Federal Reserve on course to gradually raise interest rates this year. Other data on Wednesday showed the housing market continuing to strengthen last month, with groundbreaking activity hitting its highest level in five months after being held back by adverse weather, Reuters reported.

While the Fed is expected stand pat at the end of Wednesday’s two-day policy meeting, stirring inflation, a steady housing sector and tightening labor market conditions have raised the probability of a rate hike in June.

“While few expect the Fed to announce a policy rate hike today, further evidence of building inflationary pressures will reinforce the case for further hikes in the coming months,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

Financialtribune.com