OAN’s James Meyers
11:08 AM -Wednesday, April 10, 2024
U.S. inflation had another rough month in March, increasing 3.5%, which throws doubt into whether or not the Federal Reserve will actually begin to cut interest rates as soon as June.
The new reported numbers mark the highest year-over-year increase since December, when inflation was reported at 3.4%.
The Consumer Price Index for March, which is a measure of changes in the costs of everyday goods and services, came in slightly above the 3.4% headline inflation figure economists by FactSet predicted.
The Federal Reserve’s key interest rate is currently at the highest levels in over two decades, at a range of 5.25%-5.5%.
Meanwhile, Fed officials have already alluded to the fact that a rate cut may not happen in 2024.
“If we continue to see inflation moving sideways, it would make me question whether we needed to do those rate cuts at all,” Federal Reserve Bank of Minneapolis President Neel Kashkari said in an interview last week previously reported on by CBS.
Additionally, Fed Governor Michelle Bowman said on Friday that interest rates may increase even more.
“While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse,” Bowman said in prepared remarks to a group of Fed watchers in New York on Friday.
“Reducing our policy rate too soon or too quickly could result in a rebound in inflation, requiring further future policy rate increases to return inflation to 2% over the longer run,” she added, per CNBC.
The latest March jobs report, which showed 303,000 jobs created, did not serve well for rate-cut timing.
Furthermore, Wednesday’s report from the Bureau of Labor Statistics showed that on a monthly basis, price growth rose 0.4% on a monthly basis, which was driven by shelter and gasoline, which contributed to more than half of the advance.
Motor vehicle insurance, medical care, apparel and personal care were also responsible for the increase.
Core CPI, which is a number that excludes volatile food and energy prices, stayed the same in February, at 3.8%.
The latest CPI data shows that consumer prices have yet to fall year-over-year since President Joe Biden’s administration took over the White House in January 2021.
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