Inflation Has Eased, But Is Still Elevated, Powell Says

• Inflation has eased from mid-2022 but remains elevated above the 2% target, with total PCE at 2.8% and core PCE at 3.0% for the 12 months ending February.
• Near-term inflation expectations have risen due to oil price increases caused by Middle East supply disruptions, though longer-term expectations remain consistent with the 2% goal.
• The Federal Reserve maintained the target range for the federal funds rate at 3.5% to 3.75%, following a 0.75 percentage point reduction from September through December.

Federal Reserve Chair Jerome Powell stated that inflation has eased significantly from its mid-2022 highs but remains somewhat elevated relative to the 2% longer-run goal. Near-term inflation expectations have risen due to oil price increases, and projections for total PCE inflation this year and next are higher than previously anticipated. The Fed decided to maintain the federal funds rate target range at 3.5% to 3.75%.