Fed's Data Dependence Fails When the Data Isn't Dependable.

The Federal Reserve's reliance on data to guide its decisions on interest-rate cuts is being called into question due to inconsistent consumer price statistics. The core consumer price index rose 0.4% in February, matching a high reading from January and exceeding economists' expectations. This puts the three-month annualized core inflation at 4.2%, the highest since May 2023. While the Fed is expected to hold rates steady this month, if it remains data-dependent, it may be stuck on hold for months as it waits for more encouraging reports. However, there are indications that inflation will improve in the coming months, and with signs of a potentially vulnerable labor market, it may be time for the Fed to reconsider its data dependency. [Extracted from the article]