USD: US CPI Softens to 3.4% in April
US CPI Data for the month of April came at 3.4% versus 3.5% printed in the March month. Core CPI printed at 0.30% in a Monthly Basis. CPI Data lower than previous month makes FED rate cuts sooner than expected from analyst’s side. So US Dollar dropped down more against counter pairs today.
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The US Bureau of Labor Statistics (BLS) released its latest report on Wednesday, indicating a slight decrease in inflation as measured by the Consumer Price Index (CPI) for April. Year-over-year, the CPI showed a decline to 3.4% from 3.5% in March. This figure aligns with market expectations, reflecting stability in consumer price changes over the period.
Similarly, the annual core CPI, which excludes the more volatile components of food and energy prices, also saw a decrease to 3.6% in April from 3.8% in March. This adjustment corresponds to analysts’ forecasts, indicating a consistent trend in underlying inflationary pressures.
On a monthly basis, both the CPI and the core CPI increased by 0.3%, suggesting a modest uptick in consumer prices during April. This marginal rise underscores the gradual nature of price changes within the economy.
USD: US Consumer Inflation Cools in April
In April, the US Consumer Price Index (CPI) data indicated a 3.4% increase year-over-year, a slight decrease from March’s 3.5%. Meanwhile, the core CPI, excluding volatile food and energy prices, saw a monthly rise of 0.3%. This decrease in CPI figures has prompted analysts to speculate on the possibility of earlier-than-expected interest rate cuts by the Federal Reserve (Fed), consequently leading to a decline in the US Dollar’s value against other major currencies in today’s trading.
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US consumer inflation slowed in April, signaling a possible easing of inflationary pressures at the beginning of the second quarter, according to data released on Wednesday. This unexpected decline in inflation has reinforced expectations in financial markets for a potential interest rate cut by the Federal Reserve in September.
The report also showed that retail sales remained flat last month, defying expectations for an increase. This unexpected stagnation in retail sales suggests that consumers, concerned about inflation, reduced spending particularly on online purchases and automobiles.
The data indicates a cooling in domestic demand, which could be viewed favorably by policymakers at the Federal Reserve as they aim to stabilize the economy without causing a sharp downturn.
Christopher Rupkey, chief economist at FWDBONDS, remarked that the economic data, including stagnant retail sales and cooling inflation, support the case for interest rate cuts, though the threat of inflation remains.
The Consumer Price Index (CPI) rose by 0.3% in April, following increases of 0.4% in both March and February. Notably, the cost of shelter, including rents, continued to climb, while gasoline prices surged. However, food prices remained unchanged, with some categories experiencing declines.
Year-on-year, the CPI increased by 3.4% in April, down slightly from 3.5% in March. Economists had anticipated a monthly CPI increase of 0.4%, with a year-on-year rise of 3.4%.
Inflationary pressures had been rising in previous quarters, driven by robust domestic demand. However, the April data suggests a moderation in inflation, which could provide relief for policymakers concerned about overheating.
The Federal Reserve Chair, Jerome Powell, expressed optimism that inflation would gradually decline to more manageable levels, aligning with market expectations for interest rate cuts.
Financial markets responded positively to the data, with Treasury prices rising and the dollar weakening against other currencies. There is now a higher probability, around 73%, of a rate cut in September, up from 69% before the release of the data.
While some economists anticipate rate cuts as early as July, others believe a cut may be delayed until December. The Federal Reserve has maintained its benchmark interest rate at 5.25%-5.50% since July, following multiple rate hikes in previous years.
The data also revealed that core inflation, which excludes volatile food and energy prices, rose by 0.3% in April, with notable increases in housing-related costs and healthcare. However, prices for used cars and trucks declined.
Additionally, retail sales remained unchanged in April, following a 0.6% increase in March. This unexpected stagnation in retail sales underscores consumers’ cautious spending behavior amidst higher prices, although the strong labor market has supported overall consumer spending.
USD: April CPI: Inflation Eases, Paves Way for Fed Rate Cuts
The Consumer Price Index (CPI) data for the United States in April revealed a year-over-year increase of 3.4%, down slightly from the 3.5% recorded in March. Additionally, the core CPI, which excludes volatile food and energy prices, showed a monthly increase of 0.3%.
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The lower CPI figures for April compared to the previous month have fueled speculation among analysts that the Federal Reserve (Fed) might implement interest rate cuts sooner than anticipated. This perception has led to a decline in the value of the US Dollar against other major currencies in trading today.
The April consumer price index (CPI) data, released by the U.S. Bureau of Labor Statistics, indicated a year-over-year increase of 3.4%, a slight dip from March’s 3.5% rise. Economists had anticipated a moderation in price growth for April, a trend that could potentially pave the way for interest-rate cuts in the latter part of the year.
On a monthly basis, headline inflation for April stood at 0.3%, which was marginally lower than the 0.4% uptick projected by economists. This rate mirrored the monthly inflation rates seen in March and February, both at 0.4%.
While the latest CPI figures align with market expectations and signal a return to a slowing inflation trend, Federal Reserve officials may still require further evidence of sustained progress before considering interest-rate adjustments later in the year.
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