US CPI Climbed 3.5% YoY

London: 10 April 2024 (TraderMade): US consumer prices rose more than expected in March, dashing hopes for an immediate interest rate cut by the Federal Reserve.

The Bureau of Labor Statistics reported today that the US Consumer Price Index (CPI) climbed 3.5% year-over-year, exceeding forecasts of 3.4%.

This hotter-than-anticipated inflation reading sent shockwaves through the market, causing stocks to plunge and the US dollar to surge.

Key Takeaways

• Inflation rose to 3.5% in March, higher than expected.
• Stock markets opened lower, with major indexes down over 1%.
• The US dollar jumped to its highest level against the Japanese yen since the mid-1990s.
• Hopes for a June rate cut by the Fed are fading.

Fed's Path Forward Uncertain

The Federal Reserve aims to keep inflation around 2%. Today's data suggests inflation remains stubbornly high, making it less likely the Fed will cut rates in the near future. Investors are now reassessing their expectations, with some analysts predicting a delay in the Fed's policy pivot.

Focus on Upcoming Events

The release of the Fed's March meeting minutes later today and the Bank of Canada's rate decision may offer further clues on the future direction of monetary policy.