Inflation

By Isaac Cohen*

The Republican Party recent support for more government spending and lower taxes was received by a plunge in the markets, as a sign of future inflation and higher interest rates. Several indicators confirmed this perception.

The Labor Department said, last week, the producer-price index increased 0.4 percent in January, or 2.7 percent from a year earlier. Also in January, the consumer-price index rose 0.5 percent and excluding more volatile food and energy prices it rose 0.3 percent. Additionally, the unemployment rate in January remained at 4.1 percent, but hourly wages increased 2.9 percent, from a year earlier, the highest increase since 2009.
A question is how the central bank will interpret these signals, at its next meeting in Washington on March 20-21. Particularly because the preferred indicator of inflation for the Federal Reserve is the Commerce Department’s personal-consumption-expenditures price index, which has remained under the 2 percent annual inflation objective for more than five years. The new January figure for this indicator is due on March 1 and it remains to be seen if it confirms the inflationary signals of the other indicators. If that is the case, the next meeting of the Open Market Committee, for the first time under the baton of the new Federal Reserve Chairman Jerome Powell, will approve this year’s first interest rate increase.

*International analyst and consultant, former Director ECLAC Washington Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, actual Managing Editor de MetroLatinoUSA. Periodista que cubre eventos de las comunidades latinas en Washington D.C., Maryland y Virginia. Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia. Galardonado en numerosas ocasiones por parte de la Asociación Nacional de Publicaciones Hispanas (NAHP) y otras organizaciones comunitarias y deportivas de la región metropolitana de esta capital. También premiado en dos ocasiones como Mejor Periodista del Año por la cobertura de la comunidad salvadoreña; premios otorgados por la Oficina de Asuntos Latinos del Alcalde de Washington (OLA) y otras organizaciones. Ha sido miembro del jurado calificador en diferentes concursos literarios, de belleza y talento en la región metropolitana. Ha visitado zonas de desastre en Nicaragua, Honduras y El Salvador e invitado a esos países por organizaciones que asisten a personas de escasos recursos económicos. Antes trabajó en otros medios de prensa de Virginia y Washington, D.C., incluyendo reportajes para una agencia noticiosa mundial.

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