The Federal Reserve's January policy statement omitted its previous reference to inflation making progress toward its target, adding a more hawkish tone.
However, economists at Citi expect the Fed’s preferred inflation gauge, the 12-month PCE inflation rate, to decline in the coming months as the impact of sharp price increases from early 2024 fades. They also point out that both the six-month and three-month annualized core PCE inflation rates are on course to drop below 2.5%.
The economists says that the fed's Federal Open Market Committee (FOMC) might decide that inflation "is once again making progress toward their objective--or even that it has nearly arrived at it" as early as the meeting in March.
