The U.S.
Bureau of Economic Analysis reports a 0.3% rise in the PCE inflation index for February, hitting 2.5% annually.
This figure, released on March 28, 2025, exceeds the Federal Reserves 2% target, signaling persistent price pressures.Core inflation, excluding food and energy, jumps 0.4% monthly, reaching 2.8% yearly, outpacing forecasts of 0.3% and 2.6%.
The Fed closely tracks PCE data to guide its monetary policy, keeping rates steady at 4.25%-4.5% after its March meeting.Officials project two rate cuts in 2025, but Februarys hotter-than-expected core reading raises doubts.
Inflation lingers above target, driven partly by President Trumps new 25% tariffs on cars and auto parts from Canada and Mexico.Trumps trade policies spark debate among economists, who warn tariffs lift costs for consumers and businesses alike.
A potential 0.5-0.8% inflation spike looms, threatening the Feds 2% goal, while growth forecasts dip to 1.7% for 2025.Personal income climbs 0.8% in February, yet spending grows only 0.4%, hinting at cautious households.
Businesses brace for higher costs, with uncertainty soaring as Trump plans more tariffs in April.Tariffs and Stubborn Inflation Test U.S.
Economy in 2025.
(Photo Internet reproduction)The Feds next moves hinge on data, but a slowing economyprojected to shrink 1.5% in Q1complicates decisions.
Markets see a 40% chance of a mid-2025 rate cut, though volatility persists amid trade tensions.Since 2022s 9.1% peak, inflation cools but stays 10% above pre-pandemic levels, squeezing budgets.
Trump vows to crush inflation, yet his tariffs may fuel it further, challenging the Fed and U.S.
resilience.
The story behind these figures reveals a high-stakes balancing act for policymakers and businesses worldwide.