Although the recent European and American bank turmoil has wrinkled the financial market, the European Central Bank (ECB) and the US Federal Reserve (Fed) still announced interest rate hikes at their regular meetings in March, with the main consideration being to combat stubborn inflation. The Eurozone and the United States will jointly release the latest inflation data on the 31st. It is expected that the inflation in the two places will continue to cool down, but there is still a large distance from the central bank’s 2% target, which supports the two central banks to continue to raise interest rates.
On the 31st, the euro zone will be the first to announce the March consumer price index (CPI), followed by the U.S. announcement of the February core personal consumption expenditures (PCE) price index, which is the Fed’s preferred measure of inflation.
According to the prediction of the financial website Trading Economics, the CPI in the euro zone will slow down significantly from the 8.5% annual increase in February to 7.8% in March, and the decline in energy prices is a major driving force for the cooling of inflation. Excluding the volatile energy and food items, the core CPI forecast fell to 5.5 percent on an annual basis from January’s 5.6 percent increase.
Inflation in the euro zone has gradually declined from the record high of 10.8% in October last year, but it is still at a high level. European Central Bank President Lagarde has repeatedly declared her determination to combat inflation, vowing to bring inflation back to 2%. Target.
In addition, after the U.S. CPI in February and the producer price index (PPI) in February fell to the lowest record since September 2021 and March, respectively, economists predict that the core PCE price index in February will increase from 0.6 in January. %, fell sharply to a monthly increase of 0.3%, and the annual growth rate was estimated to have dropped to 4.6% from 4.7% in January.
At the regular meeting in March, the Federal Reserve revised its inflation forecast for this year and next year by 0.1 percentage points. It is estimated that the median value of the core PCE price index this year will be 3.6%, and it will drop to 2.6% next year.
Citigroup chief U.S. economist Andrew Hollenhorst (Andrew Hollenhorst) said inflation data continued to reflect the need for more restrictive measures on an overheated economy in the United States.
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