Thursday's discount rate increase notwithstanding, the Fed is unlikely to feel rushed into tightening monetary policy after Friday's US inflation numbers. From Bloomberg:
The cost of living in the U.S. rose in January less than anticipated and a measure of prices excluding food and fuel fell for the first time since 1982, indicating the recovery is generating little inflation.
The consumer-price index increased 0.2 percent for a fifth straight month, led by higher fuel costs, Labor Department figures showed today in Washington. Excluding energy and food, the so-called core index unexpectedly fell 0.1 percent, reflecting a drop in new-car prices, clothing and shelter.
Furthermore, the US economic expansion is likely to slow in coming months. From Reuters:
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 128.4 for the week ended Feb. 12 from 130.0 the prior week.
It was the lowest reading since November 13, 2009, when it stood at 127.5.
The index's annualized growth rate declined for the tenth straight week to 17.1 percent, from 19.6 percent in the prior report, which was revised down from an original 19.7 percent.
It was the lowest rate since Aug. 7, 2009 when it read 14.6 percent.
Meanwhile, the economic recovery remains on track in the euro area. From Bloomberg:
Europe’s service and manufacturing industries expanded for a seventh month in February, as rising export orders helped to counter sluggish domestic demand.
A composite index based on a survey of euro-area purchasing managers in both industries remained at 53.7 in February, London-based Markit Economics said today. Economists forecast a drop to 53.5, according to the median of 16 estimates in a Bloomberg News survey. A reading above 50 indicates expansion...
An index of services dropped to 52 in February from 52.5 in the previous month, Markit said today. A gauge of manufacturing rose to 54.1 from 52.4.