Inflation expected to reach 2% target, but risks are increasing

From CNBC: 2025-03-03 13:55:51

Alberto Musalem, President and CEO of the Federal Reserve Bank of St. Louis, warned of rising risks for higher inflation during a speech in New York City. Inflation expectations have surged in recent weeks, reflected in drops in consumer confidence and increases in prices in the manufacturing sector.

Despite expectations for the Fed to lower rates in 2025, the central bank held rates steady in January due to persisting inflation concerns. Traders are now pricing in a 93% likelihood that rates will remain unchanged. Concerns over potential U.S. tariffs on imports are also weighing on investors’ minds.

Read more: Inflation will move toward 2% target, but risks to outlook are rising, says Fed’s Musalem