Washington, DC
Inflation still sticky: Consumer prices in the US rose 3.2% in February from a year earlier – the second consecutive month of higher-than-expected inflation. The rise was fuelled by more costly motor insurance, used-car prices, air fares and clothing. Annual core inflation, which excludes volatile food and energy prices, fell to 3.8% from 3.9% in January. Analysts had expected core inflation, which is considered a better measure of underlying inflationary pressures, to slow to 3.7%. The Federal Reserve, under chair Jerome Powell (pictured), will decide on Wednesday whether to keep its benchmark short-term interest rate at a 23-year high of between 5.25% and 5.5%, where it has been since last July. The market is still pricing in a rate cut in the first half of this year and believes a soft landing is within reach.
The inflation reading should look much better in the coming months, “but if the Fed waits for a streak of two or three good reports before cutting rates, then policymakers may find themselves sitting on their hands until at least midsummer”, says Jonathan Levin on Bloomberg. There are, after all, signs that the US labour market may not be quite as buoyant as it seems, with, for example, more workers clinging to their jobs, fewer hours being worked and an unemployment rate that has been steadily creeping higher. “With the disinflation trends already in place, there’s no reason for the Fed to push its luck.”
Austin
Oracle prophesies growth: Shares in tech giant Oracle surged 13% in extended trading on Monday after posting better-than-expected third-quarter earnings, says Kif Leswing on CNBC. Group revenue rose 7% from a year earlier to $12.4bn, while net income jumped 27% to $2.4bn. Its cloud computing business, in particular, reported a 25% jump in revenue to $5.1bn. The company also hinted at an announcement related to chipmaking heavyweight Nvidia, expected to be made next week. Oracle added several “large new cloud infrastructure” contracts during the quarter, and the company was committed to achieving its goal of $65bn in sales by 2026, which “might prove to be too conservative given our momentum”, said Oracle’s CEO Safra Catz. It is working to grab a greater share of the cloud-computing market, positioning itself as a cheaper alternative to the likes of Amazon, Microsoft, and Google’s parent Alphabet. Oracle is also building more data centres to keep up with demand for more generative artificial intelligence (AI) infrastructure, including 20 data centres for Micro
