The U.S. Federal Reserve will welcome inflation dropping below the symbolic 5% level for the first time in two years. But that may still be insufficient for the Fed leaders to cut rates as they look for inflation to return to their 2% goal. CPI inflation for the month of April rose 0.4% month-on-month and 4.9% year-on-year. Stripping out food and energy prices, the monthly increase was the same 0.4% and the annual increase was 5.5%.
Encouraging Signs
Shelter prices decelerated to a 0.4% month-on-month increase. Though shelter costs are still rising, that’s encouraging. It suggests home prices within the CPI index are trending down, after being a big driver of higher inflation over recent years.
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