05/11/2022

U.S. Consumer Price Gains Slow

However, inflation is still hot

U.S. consumer price growth slowed sharply in April as gasoline prices eased off record highs, suggesting that inflation has probably peaked, though it is likely to stay hot for a while and keep the Federal Reserve's foot on the brakes to cool demand.

That aspect was reinforced by the report from the Labor Department on Wednesday, which also showed underlying monthly inflation pressures building up again after a brief lull in March as airline tickets prices notched their biggest increase on record. Rents rose by the most since 2006.

"The country’s struggle with high inflation isn't over yet, but the markets can still breathe a sigh of relief that it is not getting any worse," said Christopher Rupkey, chief economist at FWDBONDS in New York. "The Fed can stay on plan with 50 bps rate hikes at the next two meetings in June and July and there is no reason to move more expeditiously to fight inflation."

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