{"id":23386,"date":"2024-04-10T19:53:56","date_gmt":"2024-04-10T19:53:56","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/10\/us-consumer-inflation-tops-forecasts-again-likely-delaying-fed-rate-cuts-times-of-india\/"},"modified":"2024-04-10T19:53:56","modified_gmt":"2024-04-10T19:53:56","slug":"us-consumer-inflation-tops-forecasts-again-likely-delaying-fed-rate-cuts-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/10\/us-consumer-inflation-tops-forecasts-again-likely-delaying-fed-rate-cuts-times-of-india\/","title":{"rendered":"US consumer inflation tops forecasts again, likely delaying Fed rate cuts – Times of India"},"content":{"rendered":"
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A measure of underlying US inflation topped forecasts for a third straight month, heralding a fresh wave of price pressures that will likely delay any Federal Reserve interest-rate cuts until later in the year.
The so-called core consumer price index, which excludes food and energy costs, increased 0.4% from February, according to government data out Wednesday.From a year ago, it advanced 3.8%, holding steady from the prior month.<\/p>\n
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Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.4% from the prior month and 3.5% from a year ago, an acceleration from February that was boosted by higher energy prices, Bureau of Labor Statistics figures showed.
Wednesday\u2019s report adds to evidence that progress on taming inflation may be stalling, despite the Fed keeping interest rates at a two-decade high. With a strong labor market still powering household demand, officials have been adamant they\u2019d like to see more evidence that price pressures are sustainably cooling before lowering borrowing costs.<\/p>\n

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Treasury yields and the dollar jumped while S&P 500 index futures tumbled. Swaps traders slashed the degree to which they see the Fed will cut rates this year. Minutes from the Fed\u2019s meeting last month will be released later Wednesday.
\u201cThe sound you heard there was the door slamming on a June rate cut. That\u2019s gone,\u201d David Kelly, JPMorgan Asset Management\u2019s chief global strategist, said on Bloomberg Television.
Core CPI over the past three months increased an annualized 4.5%, the most since May.
Gasoline and shelter accounted for over half of the overall monthly advance, the BLS said. Costs for car insurance, medical care and apparel increased in the month, while prices for new and used cars fell.
Shelter prices, which is the largest category within services, rose 0.4% for a second month. Owners\u2019 equivalent rent \u2014 a subset of shelter, which is the biggest individual component of the CPI \u2014 climbed by that much as well.
Excluding housing and energy, services prices accelerated to 4.8% from a year ago, the most since April 2023, according to Bloomberg calculations. While central bankers have stressed the importance of looking at such a metric when assessing the nation\u2019s inflation trajectory, they compute it based on a separate index.
That measure, known as the personal consumption expenditures price index, doesn\u2019t put as much weight on shelter as the CPI does. That\u2019s part of the reason why the PCE is trending much closer to the Fed\u2019s 2% target.
Policymakers will have access to one more PCE report, as well as another look at the producer price index, before their next policy meeting concludes on May 1. Fed officials have effectively ruled out a rate cut then.
\u201cEven though the Fed doesn\u2019t target CPI, it is another reason for delaying any rate cuts and\/or reducing the number expected this year,\u201d said Kathy Jones, Charles Schwab\u2019s chief fixed-income strategist. \u201cIf service sector inflation is sticky, then it doesn\u2019t leave much room to ease.\u201d
Unlike services, a sustained decline in the price of goods over most of the past year has largely been providing some relief to consumers \u2014 though economists expect that to be a less reliable source of disinflation going forward. So-called core goods prices, which exclude food and energy commodities, fell 0.2% in the month.
With energy prices also back on the rise, it\u2019s unclear where the next big drag on inflation will come from. Economists have long been anticipating some easing in shelter price growth, but so far, that hasn\u2019t really happened yet.
Policymakers have also been hesitant to cut interest rates given the strength of the labor market, especially after last week\u2019s jobs report showed robust hiring and the unemployment rate fell. A separate report Wednesday showed real earnings growth decelerated, rising at the slowest annual pace since May.
That\u2019s helps explain why President Joe Biden\u2019s approval ratings are struggling for momentum going into this year\u2019s presidential election.<\/div>\n