In April, U.S. inflation remained steady, indicating that elevated price increases may persist longer than anticipated, complicating the Federal Reserve’s plans to cut interest rates. The personal consumption expenditures (PCE) price index rose 0.3% for the month and 2.7% year-on-year, matching March’s figures and meeting economists’ expectations.
Despite raising the benchmark policy rate significantly since March 2022 to curb demand, the Fed faces ongoing inflation and labor market pressures. However, recent data showed some relief with slower job growth and a smaller-than-expected increase in the consumer price index. Consumer spending growth also slowed in the first quarter, contributing to economic moderation.
