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Persistent Inflation Pressures Could Delay Fed Action
The U.S. consumer price index (CPI) rose 0.38% in March, slightly hotter than the consensus forecast and continuing an unsettling trend. Taking out more volatile food and energy prices, the net 3-month annualized core CPI inflation rate is now above 4.5%. More concerning, one of the Federal Reserve’s preferred aggregations within that measure – core services ex shelter – accelerated to 8% on a net 3-month annualized basis. Markets were quick to respond to the stronger inflation data, signaling a much lower likelihood of a Fed rate cut in June or July than previously priced. To put it mildly, the March data ... (full story)