CPI: United States inflation rises in March – 04/10/2024 – Market

U.S. consumer prices rose more than expected in March as rising gasoline and housing costs cast more doubt on whether the Federal Reserve will begin cutting interest rates in June.

The CPI price index rose 0.4% last month, after advancing at the same pace as in February, the United States Department of Labor said on Wednesday (10).

Gasoline and housing costs, which include rent, accounted for more than half of the increase.

In the 12 months to March, the CPI increased by 3.5%, also due to lower numbers last year. In February, accumulated inflation was 3.2%.

Economists consulted by Reuters predicted that the CPI would increase 0.3% in the month and advance to 3.4% on an annual basis.

Excluding the volatile food and energy components, the CPI rose 0.4% last month, following a similar increase in February and January.

In the 12 months to March, the so-called core index rose 3.8%, matching February’s increase.

While the rise in consumer prices has slowed from a peak of 9.1% in June 2022, the downward trend has slowed in recent months. The US central bank has an inflation target of 2%.

Following stronger-than-expected March job growth last week, as well as a drop in the unemployment rate to 3.8% from 3.9% in February, some economists have pushed back interest rate cut expectations to July. Others still believe that the Fed (Federal Reserve) will act in June. A minority sees the window for interest rate cuts closing.

Fed Chairman Jerome Powell has repeatedly said the central bank is in no rush to start cutting lending rates.

Financial markets as of Wednesday were seeing a probability of about 56.0% that the Fed would cut rates at its June 11-12 policy meeting, according to CME’s FedWatch tool.

Since July 2023, the Fed has maintained its rate in the range of 5.25% to 5.50%, after increasing it by 5.25 points from March 2022.