ChainThink reports that on March 11, UBS Chief Economist Paul Donovan noted that the U.S. February Consumer Price Index data, although preceding recent market volatility, remains crucial for the Federal Reserve's policy decisions.
He expects the underlying inflationary pressures reflected in today’s data to be moderate and believes the Fed should respond only to broad-based price increases. Donovan emphasized that the Fed lacks policy tools to address isolated market disruptions. He also noted that the nearly 27% rise in gasoline prices since January’s low will not be reflected in today’s data, but consumers will notice sharp increases in some grocery item prices. (Goldenberg)