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US consumer inflation grows more than expected in March, Fed rate cut looms

US consumer inflation grows more than expected in March, Fed rate cut looms


US consumer price increases remained high in March owing to gas, rents, and car insurance, the government said in a report. The March figures mark the third straight month of inflation readings well above US Federal Reserve’s 2% target. The numbers could put a affect when Fed weighs in on rate cuts and by how much interest rates are brought down this year.

People shop in the food section of a retail store in Rosemead, California.(AFP)

Data showed that prices outside the volatile food and energy categories rose 0.4% from February to March. As compared to a year earlier, these core prices were up 3.8% and were unchanged from the year-over-year rise in February. Overall consumer prices rose 0.4% from February to March and compared with 12 months earlier, prices rose 3.5%, up from a year-over-year figure of 3.2% in February.

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The consumer inflation in March threatens the prospect of multiple interest rate cuts this year while the US Fed said that the country’s economy is healthy and does not need benchmark rate cuts despite their earlier projections that they would reduce rates three times this year.

The figures will disappoint the White House as the Republicans will blame incumbent US President Joe Biden for high prices, polls have shown.

Fed Chair Jerome Powell stressed that the policymakers need more confidence that inflation is steadily slowing to the 2% target.



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