The wait is over, and the US Consumer Prices Index (CPI) data has been released with much fanfare, as headline CPI comes below the 5% mark.
Headline inflation fell to 4.9% year-over-year in April, lower than the previous month’s 5%, while Core CPI, which excludes food and energy prices, remained muted at 5.5% annually.
On a seasonally adjusted basis, Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in April, while shelter was the most significant contributor to the monthly increase. The US Bureau of Labor Statistics also reported that used vehicles, trucks, and gasoline followed shelter as the metrics that increased the most.
All hope of an interest rate pause in June, as signalled by the US Federal Reserve (Fed) after last week’s 25 basis point rate hike, could be possible but not likely. US Fed Chair Jerome Powell reiterated in the press conference after the rate announcement that future decisions will be data-dependent. With inflation trickling lower but still well above 2% and the CME FedWatch Tool at an 80.1% probability of a rate pause, the US labour market metrics will be closely watched.
Sources: US Bureau of Labor Statistics
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