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U.S. inflation in March hits Fed goal

Xinhua,May 02, 2018 Adjust font size:

WASHINGTON, April 30 (Xinhua) -- U.S. inflation in March hit the Federal Reserve's 2-percent goal for the first time in a year, indicating inflation pressure building up.

The price index for personal consumption expenditure (PCE) in March rose 2 percent from a year ago, said the Commerce Department on Monday. This was the biggest increase since February 2017 following a 1.7-percent increase in February this year.

Excluding the volatile food and energy prices, the core PCE price index rose 1.9 percent in March, the largest increase since February 2017.

Fed officials are widely expecting the inflation will go up this year and stabilize around the central bank's 2-percent target over the medium term, based on optimistic economic outlook.

In addition to the good inflation data, household consumption also stepped up growth pace in March.

Personal consumption expenditure rose 0.4 percent in the month, compared to zero growth in February, said the Commerce Department. Personal income increased 0.3 percent in the month, the same growth in the previous month.

The Fed is scheduled to hold a monetary policy meeting this week, at which the central bank is widely expected to keep interest rates unchanged.

The improved inflation and consumption data would fuel policymakers' debate over the pace of monetary tightening.

Based on the improved economic outlook, some Fed officials are considering faster pace of interest rate hikes. Market investors are expecting that the central bank might raise interest rates by a total of four times this year. Enditem