US core CPI tops forecasts again, likely delaying Fed rate cuts
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The US core consumer price index (CPI) increased 0.4% from February, holding steady at 3.8% from a year ago, likely delaying any Federal Reserve (Fed) interest-rate cuts until later in the year. The overall CPI climbed 0.4% from the prior month and 3.5% from a year ago, boosted by higher energy prices. The report suggests that progress on taming inflation may be stalling, despite the Fed keeping interest rates at a two-decade high. Treasury yields and the dollar jumped, while S&P 500 index futures tumbled. Swaps traders lowered their expectations of Fed rate cuts this year. The core CPI over the past three months increased an annualized 4.5%, the most since May. Gasoline and shelter accounted for over half of the overall monthly advance. Shelter prices rose 0.4% for a second month. Excluding housing and energy, services prices accelerated to 4.8% from a year ago, the most since April 2023. The Fed's preferred inflation metric, the personal consumption expenditures (PCE) price index, is trending closer to the 2% target. Fed officials have ruled out a rate cut at their next policy meeting on May 1.



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