News Headlines Article

Slowing health-care costs counteract Fed’s inflationary medicine
San Francisco Chronicle

A welcome relief from rising health-care costs for U.S. consumers is being less warmly received at the Federal Reserve.

The slowdown is frustrating the efforts of Chair Janet Yellen and her colleagues to lift inflation out of the doldrums, suggesting they will need to press on with record-low interest rates. Price increases, not counting volatile food and energy costs, decelerated to a 1.1 percent year-over-year pace in February from 2 percent two years earlier, with medical goods and health-care services accounting for almost a third of the slowdown, according to data compiled by Bloomberg based on the government’s personal consumption expenditures price index.