The US Inflation Data has arrived for March, with the figure increasing to 3.%, which was higher than many expected. Indeed, the outcome has resulted in the second straight month of increasing inflation. Moreover, it greatly reduces the potential for interest rate cuts from the Federal Reserve.
The Bureau of Labor Statistics reported that inflation has increased from 3.2% in February. Now, all eyes are on how the Federal Reserve will respond to the news. Specifically, the markets will be seeking to get insight from Fed chair Jerome Powell regarding the direction that the Central Bank will take the interest rate conversation.
Also Read: US Economy: What Will Happen If the Federal Reserve Doesn’t Cut Rates Soon?
US Inflation Rises Yet Again, Reaching 3.5%
For the United States economy, combating a rising inflation rate has been the Federal Reserve’s most important fight over the last several years. Indeed, the Central Bank has continued to seek its target of 2% with more than a year’s worth of interest rate increases.
Although the market has anticipated a cut in interest rates after positive developments over the last several months, March data has seemingly nixed those hopes. The US Inflation data has risen to 3.5%, which was higher than expectations.
Also Read: Federal Reserve Leaves Interest Rates Unchanged Yet Again
The increase follows a pattern that first began last month. February data shows inflation increased to 3.2% from a 3.1% mark that was recorded in January. Moreover, today’s data shows the highest level of inflation since December, when the figure was reported at 3.4%.
As previously noted, all eyes will now be fixed on remarks from Fed Chair Jerome Powell. He had previously told citizens to expect three rate cuts throughout 2024. Specifically, this was said after the Federal Reserve opted to forgo such cuts in the first four months of the year. Now, expectations for those interest rate cuts have fallen to their lowest level since October 2023.