- The CPI inflation report is likely to keep the Fed officials on track to raise interest rates at their meeting in March and to signal that further increases will be likely
- inflation has slowed in recent months largely because of falling prices of energy and other goods
- large increases in housing costs have slowed, but haven't yet filtered through to official price gauges
- Fed officials have highlighted a narrower subset of prices on services that exclude energy and housing, which they believe could better capture underlying price pressures
- last month, investors in interest-rate futures had expected the central bank would raise rates to 4.9% and then lower rates in the second half of the year. Those expectations have shifted. Investors now expect the Fed funds rate to be around 5.2% and hold above 5% through the end of the year.
