Shafaqna English– Two consecutive inflation readings that came in hotter than expected may deeply disappoint most U.S. central bankers, many of whom had been hoping that price pressures would gradually ease on their own without the need for policy intervention.
These stronger-than-anticipated figures effectively set the table for an interest-rate hike at the Federal Reserve’s meeting next week, and they also raise the possibility that additional hikes could follow in the months ahead, depending on how inflation evolves.
The Bureau of Labor Statistics reported that U.S. consumer prices excluding energy and food — the preferred gauge of underlying inflation — increased 0.3% last month from the prior month, topping the 0.2% that economists had expected.
Year over year, core CPI rose 2.4%, and the overall consumer inflation rate measured 3.4%, suggesting that price growth remains firm and broad-based, which strengthens the case for further monetary tightening by the Federal Reserve.
Source: Reuters