US CPI: We’d champion the Fed not to raise rates at all, says deVere CEO

By George Prior

Quick take by Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations:

“US inflation slows to a 6% annual rate, which came in as expected, and represents the slowest annual increase in consumer prices since September 2021.

“Whilst prices in February were 6% higher than a year ago, they are down from an annual rate of 6.4% in January and considerably lower than the 9.1% peak of inflation experienced in June 2022.

“This slowdown is a win for the Federal Reserve, which has been fighting an uphill battle to try and cool red hot inflation.

“The 6% headline figure is positive, and together with the collapse of Silicon Valley Bank and Signature Bank, the second and third biggest bank failures in US history, will certainly give the Fed cause to reconsider their rate hiking agenda.

“However, against a backdrop of a robust labor market, we still expect the central bank will raise interest rates by a quarter-point at their next meeting on March 22.

“Should the Fed pause the rate hike agenda now, it puts them at risk of exposing themselves to inflation speeding up again. And then they would be forced to make larger hikes later, which would harm their objective and dent their credibility, so they can be expected to err on the side of caution.As such, it is likely that they will hike rates, albeit by a quarter-point.

“But due to the time-lag associated with CPI data, we would champion a move by the Fed not to raise rates at all later this month.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.