The April inflation report will keep the Federal Reserve on track to pause rate hikes at its meeting next month.
on track to pause rate hikes was up 4.9 percent compared with a year ago, slightly below the five percent 12-month gain seen in March and the five percent forecast by economists. This is the tenth straight month of declines in the year-over-year pace of inflation., rising 0.4 percent after the mild 0.1 percent in March. That puts another check in the April acceleration column on the recession scorecard we’ve been keeping for the past several weeks.
Core prices, which exclude food and energy, are basically going nowhere. They rose 0.4 percent in April, just as they had in March and only slightly below February’s 0.5 percent. This was in line with expectations, which only goes to show that expectations have caught up with the fact thatOn a year-over-year basis, core prices were up 5.5 percent, a smidge below the 5.6 percent recorded in March and also in line with expectations.
. It is worried about causing further turmoil in the banking sector. Officials are also convinced that the lagged effects of the ten previous hikes are still working their way through the economy and that financial conditions will continue to tighten even as the policy rate remains unchanged. They would like to step back from the hikes and see how things go.
for the first time since this inflationary surge began. The dovish members will look at the numbers and see nothing to scare them away from pausing.It’s always dangerous to rely too much on one month’s data. Jason Furman has helpfully calculated the averages over various time spans. As you can see, they showInflation coming in high again, despite a continued slowdown in shelter growth but because of a rebound in goods prices.
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