WASHINGTON (AP) — The Federal Reserve's closely watched price gauge fell slightly last month, a sign that inflation may be easing after rising in the first three months of this year.
Friday's report from the Commerce Department showed that prices, excluding volatile food and energy categories, rose 0.2% in the March-April period, down from 0.3% the previous month. Compared to the previous year, “core” prices rose by 2.8% in April, the same level as in March.
Inflation fell sharply in the second half of last year but has since stabilized above the Fed's target of 2% in the first few months of 2024. With the advent of opinion polls As rising rents, groceries and gasoline irritate voters as the presidential campaign heats up, Donald Trump and his Republican allies have sought to shift the blame to President Joe Biden.
a A series of recent statements by Federal Reserve officials They stressed their intention to keep borrowing costs high as long as there is a need to completely overcome inflation. Last March, Fed policymakers collectively expected three interest rate cuts this year, starting in June. However, Wall Street traders now expect only one rate cut this year, in November.
New York Fed President John Williams, an influential Fed official, said Thursday that he expects inflation to start slowing again in the second half of the year. Until that happens, Federal Reserve Chairman Jerome Powell has made clear that the central bank is prepared to keep its key interest rate at 5.3%, its highest level in 23 years.
The central bank raised its benchmark interest rate from near zero to its current peak in 15 months, the fastest such increase in four decades, in an attempt to curb inflation. The result was dramatically higher interest rates on mortgages, auto loans, and other forms of consumer and corporate borrowing.