US consumer inflation accelerates to 3.5% in March, dashing hopes of a rate cut
Federal Reserve may be wary of an early interest rate after spike in inflation figures
US consumer inflation continued to accelerate last month, according to US government data published Wednesday, reducing the chances of an early interest rate cut from the Federal Reserve.
The US central bank has raised interest rates to the highest level in 23 years as it attempts to bring inflation back down firmly to its long-term target of two percent.
Price increases have slowed significantly from their peak in 2022, but have crept higher in recent months, keeping the markets guessing about when the Fed could start cutting rates, even as other indicators of US economic strength have remained resilient.
The annual consumer price index (CPI) came in at 3.5 percent in March, up 0.3 percentage points from February, the Labor Department said in a statement.
This was slightly above expectations of a 3.4 percent rise, according to a survey of economists conducted by Dow Jones Newswires and The Wall Street Journal.
Monthly inflation came in at 0.4 percent, also slightly above expectations.
The indexes for shelter and gasoline together contributed "over half" of the monthly increase, according to the Labor Department.
A widely-watched inflation measure excluding volatile food and energy prices rose at an annual rate of 3.8 percent, in line with the data from February.
The so-called "core" inflation index rose 0.4 percent in March from a month earlier, according to the Labor Department.