U.S. consumer prices increased solidly in December amid a surge in the cost of gasoline, though underlying inflation remained tame as the economy battled a raging COVID-19 pandemic that has weighed on the labor market and services industry. Inflation could, however, temporarily accelerate this year as the government provides more money to stimulate the economy, and the consumer price declines early in the coronavirus crisis wash out of the calculations. But that is unlikely to have an impact on the Federal Reserve, which has signaled it would tolerate higher prices after inflation persistently undershot the U.S. central bank’s 2% target. The Fed has slashed interest rates to near zero and is pumping money into the economy through asset purchases. Economists expect the ultra-easy […]

Posted in: USA