US consumer price growth remains weak

A woman buying food in the US Image copyright Getty Images
Image caption Rising food prices were the biggest contributor to consumer inflation in February

US consumer prices were little changed in February, indicating that inflation continues to remain tame.

The consumer price index rose 0.1%, from a month earlier. That matched the increase seen in January.

Inflation in the US has remained low, held in check by slow economic growth and high unemployment.

The data comes as the US Federal Reserve begins its two-day meeting where it will release its latest monetary policy and economic outlook.

Core consumer prices, which exclude volatile food and energy costs, also rose 0.1% from a month ago, the US Labor Department said.

Fed policy

Low inflation has given the US central bank the leeway to carry out a massive stimulus programme aimed at stimulating growth in the economy.

But the Fed has been scaling back some of that stimulus in recent months.

Its bond-buying programme - which for most of last year was running at $85bn a month - has been cut by $10bn at the Fed's last two meetings so that it now stands at $65bn a month.

Most analysts expect the central bank to announce a further reduction of $10bn a month on Wednesday.

The bond purchases are aimed at lowering long-term interest rates to encourage more borrowing and spending.

But if inflation continues to remain really low, or the rate dips, the timescale of the tapering process could be extended, as very low inflation removes one incentive to spend.

Related Topics