US inflation increases again

CPI inches higher

US inflation increases again

A key measure of underlying inflation in the US came in above forecasts in March, increasing from the previous month and year over year in a development that likely rules out the prospect of an imminent Federal Reserve interest rate cut.

Government data released Wednesday showed the so-called core consumer price index – which excludes the cost of food and energy – jumped by 0.4% month over month and 3.8% compared with the previous year.

Meanwhile, the overall consumer price index (CPI) posted annual growth of 3.5%, spurred by high energy prices, and also rose by 0.4% on a monthly basis.

Expectations around a possible Fed rate cut in its next announcement have faded in recent months amid evidence of a resilient economy and persistent inflation, with today’s news all but guaranteeing the central bank will hold steady in its next deliberations.

A&D Mortgage founder and chief executive officer Max Slyusarchuk said today’s news marked unwelcome reading for those holding out hopes on an imminent rate cut.

“Prices continue to rise overall, pressuring the finances of American households in particular,” he said in a statement. “More and more, families are feeling the squeeze of rising home and auto insurance costs, which continue to edge higher and higher. However, the economy remains strong, so don’t expect the Fed to lower rates any time soon.”

The Fed is due to meet for its next decision on interest rates on April 30/May 1.

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