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Inflation looks like it's here to stay
Fed officials believed that higher inflation readings in January and February 2024 were a blip.
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By
Lucy Brewster
11 April 2024
less than 3 min read
The latest inflation numbers are in and they’re higher than expected: The Consumer Price Index, which measures how much everyday goods and services cost, showed that that last month’s inflation remained stubbornly above where the Fed wanted it to be. Now, the hopes and dreams of the American stock market, which were pinned to an interest rate cut in June, are somewhere near Bikini Bottom.
The big numbers from the data released yesterday:
In March, inflation rose 3.5% from the year before, up from 3.2% in February.
The “core” CPI reading, which excludes volatile food and fuel prices, came in even higher, rising 3.8% on an annual basis. That’s the same as in February, but this time it’s serious.
Half of the increases came from rising gas prices and housing.
Why is that such a problem? After seeing inflation fall by 3% over the course of 2023, Fed officials believed that higher inflation readings in January and February 2024 represented a hiccup in an otherwise downward trajectory. However, with the March reading also coming in hotter than anticipated, analysts say this is more than a fluke. That means hopes for a June interest rate cut are dashed.