While there is ongoing debate among reasonable individuals about whether disinflation in the US is actually stalling, recent data suggests that the underlying strength of the economy may be preventing Federal Reserve monetary policy from being reduced. On Friday, the Bureau of Economic Analysis released personal spending data for February, which increased by 0.4% after adjusting for inflation, surpassing the median estimate of economists surveyed by Bloomberg who predicted a 0.1% increase. Additionally, reports from the previous day showed that consumer sentiment had reached its highest level since July 2021, weekly initial jobless claims had decreased and pending home sales had rebounded in February following a decline in January. Despite these positive signs, some experts argue that disinflation could still pose challenges for Federal Reserve monetary policy in terms of reducing benchmark interest rates.
