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US core inflation shows 0.2 percent moderation in April
(MENAFN) The latest data from the Commerce Department indicates a softening of the US Federal Reserve's preferred inflation gauge for April. The core Personal Consumption Expenditures (PCE) price index, excluding volatile food and energy components, saw a modest monthly increase of 0.2 percent in April, down from a 0.3 percent gain in March. This figure fell below market expectations, which had anticipated a 0.3 percent rise.
On an annual basis, the core PCE price index showed stability, maintaining a 2.8 percent increase in April, mirroring the year-on-year rise seen in March and aligning with market estimates.
When accounting for food and energy prices, the overall PCE price index registered a 2.7 percent annual increase in April, consistent with the previous month's figures. On a monthly basis, this broader index also showed a 0.3 percent uptick in April, in line with expectations.
The Federal Reserve has responded to persistent inflationary pressures by implementing a series of interest rate hikes. Between March 2022 and July 2023, the Fed raised the federal funds rate a total of 11 times, bringing it to the 5.25 percent-5.5 percent target range, the highest level observed in over two decades.
However, the central bank adopted a more cautious approach last year, forgoing four planned rate hikes, followed by an additional three this year. Speculation is now rife that the Fed may enact its first rate cut in the latter half of this year, as policymakers continue to grapple with the challenge of reigning in inflation while maintaining economic stability.
On an annual basis, the core PCE price index showed stability, maintaining a 2.8 percent increase in April, mirroring the year-on-year rise seen in March and aligning with market estimates.
When accounting for food and energy prices, the overall PCE price index registered a 2.7 percent annual increase in April, consistent with the previous month's figures. On a monthly basis, this broader index also showed a 0.3 percent uptick in April, in line with expectations.
The Federal Reserve has responded to persistent inflationary pressures by implementing a series of interest rate hikes. Between March 2022 and July 2023, the Fed raised the federal funds rate a total of 11 times, bringing it to the 5.25 percent-5.5 percent target range, the highest level observed in over two decades.
However, the central bank adopted a more cautious approach last year, forgoing four planned rate hikes, followed by an additional three this year. Speculation is now rife that the Fed may enact its first rate cut in the latter half of this year, as policymakers continue to grapple with the challenge of reigning in inflation while maintaining economic stability.
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