Inflation, as measured by the producer price index, declined to 2.2% for the year ending in May, the Bureau of Labor Statistics reported Thursday in good news for the Federal Reserve as it seeks to bring the economy back to normal conditions.
index, declined to 2.2% for the year ending in May, the Bureau of Labor Statistics reported Thursday in good news for the Federal Reserve as it seeks to bring the economy back to normal conditions.
The downward dip was not expected. Most forecasters anticipated PPI inflation to rise for the year ending in May, so the numbers bode well for the Fed and households.The most recent reading of the more closely watched consumer price index, released Wednesday, showed thatThe Fed wants inflation to run at 2%, so while there has been progress in bringing inflation down from its peak of about 9% in 2022, there is still a way to go for the central bank.
Fed officials said there has been “modest” further progress in bringing down inflation in recent months, but are split on where interest rates will be by the end of the year, with most, though not all, thinking there will be at least one rate cut this year.
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