The Consumer Price Index rose 3.4% in April on an annual basis, signaling a slight moderation after hotter-than-expected price hikes at year start.
That was in line with a forecast for a 3.4% increase from economists polled by financial services company FactSet. It’s also slightly cooler than March’s 3.5% inflation bump.
Wall Street is closely watching Wednesday’s CPI report for signs that the Federal Reserve’s battle against inflation is regaining some ground after prices ticked higher in the first three months of 2024. Stubborn inflation has prompted the Federal Reserve to push back expectations for rate cuts in 2024, with Fed Chair Jerome Powell saying the central bank prefers to keep rates high until inflation retreats to about 2% on an annual basis, rather than risk cutting too early and fueling another bout of price spikes.
On Tuesday, Fed Chair Jerome Powell reiterated that he expects inflation to ultimately reach the central bank’s 2% target. But in remarks during a panel discussion in Amsterdam, Powell acknowledged that his confidence in that forecast has weakened after three straight months of elevated price readings.
The Fed’s policymakers have raised their key interest rate to a 23-year high of 5.3% in an effort to quell rising prices. Inflation has fallen sharply from 9.1% in the summer of 2022 but is higher now than in June 2023, when it first touched 3%.
—With reporting by the Associated Press. This is a developing story and will be updated.
Source Agencies
