As long-awaited revisions to inflation data are set to confirm, it is expected that prices will continue to move in the Federal Reserve’s desired direction. This year’s revisions, made as part of the routine process of adjusting the consumer price index in the last five years, did not show any significant changes compared to previously published data. Last year’s data showed inflation had fallen less aggressively than previously thought, prompting investors and economists to cautiously await revised data.
Members of the Federal Reserve’s Open Market Committee (FOMC) indicated they would consider the revision data as they continued to weigh when to start cutting interest rates. Chairman Jerome Powell expressed that he is still looking for “confidence” that inflation is falling in a sustainable way. One economist, CIBC senior economist Ali Jaffery, urged caution in interpreting the revised data. He noted that there was little risk of surprises in this year’s revisions, as pre-pandemic seasonal patterns re-emerged in 2023. Overall, CPI revisions confirmed the disinflationary trend, providing reassurance to investors and FOMC members.