Us Cpi Recorded At 4 In April Shows Marginal Increase

Us Cpi Recorded At 4 In April Shows Marginal Increase by Andrew Blumer last updated on June 11, 2023

US CPI Recorded At 4.9% In April, Shows Marginal Increase

The much-awaited US inflation data for April is finally released, which shows that inflation is still turning higher in the country.

In the past few years, inflation has become a key indicator that's watched by the Feds. In fact, most of the Fed's policy is shaped by the US inflation report!

Core Price Inflation In April Was 4.9%

As per the data from BLS, the CPI reading for the month of April increased by 4.9% on a yearly basis. Most economists were expecting the core price index to be near the same level (5%) as seen during March.

If we look at the month-on-month basis, the core figure and the headline inflation also increase by 0.4%.

Although the actual CPI reading is below estimates, it is still way higher than the Fed's target of 2%. It's been years since the Fed is trying to bring inflation down to 2%. According to Fed, a 2% inflation will help the economy to achieve sustainable and steady growth.

Just a week ago, Fed introduced yet another rate hike of 25 bps which has raised the Fed's benchmark index to 5% - 5.25%.

In the beginning of 2022, the interest rates were near zero, which highlights how far the Fed has come with its policy of rate hikes.

For now, there are rumours that the Fed may stop it's tightening camping starting from the June meeting. However, we can't ignore the comments from Jerome Powell, who said that the Fed is ready to do more!

For now, the inflation is still more than half of the Fed's target, but we also need to remember that interest rates take some time to show their full effect. But to think that inflation will be brought under control in the next few months appears to be a far-fetched idea for now.

However, there are some analysts who believe that the Fed will stop its tightening policy starting in November or December.