U.S. consumer prices rose
U.S. consumer prices increased less than expected in April, indicating that inflation resumed its downward trend at the start of the second quarter, boosting financial market expectations for a September interest rate cut.
The consumer price index (CPI) rose 0.3% last month, following a 0.4% increase in both March and February, according to the Labor Department’s Bureau of Labor Statistics (BLS) on Wednesday. Over the 12 months through April, the CPI climbed 3.4%, down slightly from March’s 3.5% increase. Economists polled by Reuters had predicted a 0.4% monthly rise and a 3.4% year-on-year gain.
The annual rise in consumer prices has decreased from a peak of 9.1% in June 2022, though progress has been uneven. Inflation picked up in the first quarter due to strong domestic demand after moderating for much of last year. April’s slowdown was a relief after data on Tuesday showed a jump in producer prices. Economists attribute inflation to rising costs in services such as motor vehicle insurance, housing, and healthcare.
They predict inflation pressures will ease this quarter, with prices gradually moving toward the Federal Reserve’s 2% target as the labor market cools.Fed Chair Jerome Powell echoed this sentiment on Tuesday, saying, “I expect that inflation will move back down on a monthly basis to levels that were more like the lower readings that we were having last year.”Financial markets anticipate that the U.S. central bank will begin lowering borrowing costs in September.
U.S. consumer price
A few economists foresee the Fed starting its easing cycle in July, while others believe a rate cut could occur in December, if at all. Earlier this month, the central bank kept its benchmark overnight interest rate unchanged in the 5.25%-5.50% range, where it has been since July. The Fed has raised its policy rate by 525 basis points since March 2022.
U.S. consumer price
Excluding the volatile food and energy components, the core CPI rose 0.3% in April, following a 0.4% increase in March. Over the 12 months through April, the core CPI rose 3.6%, marking the smallest year-on-year gain since April 2021, compared to a 3.8% increase in March.
