The annual inflation rate moderated to 3.3 per cent in May from 3.4 per cent in April…reports Asian Lite News
In a development for the US economy, the Bureau of Labor Statistics released the Consumer Price Index (CPI) data for May 2024, indicating a slight easing in inflationary pressures.
The CPI for May showed an annualized increase of 3.3 per cent, a modest deceleration from April’s 3.4 per cent, falling short of economists’ expectations that it would remain steady.
This data release comes just hours before the Federal Reserve policy meeting, potentially impacting the central bank’s future interest rate decisions.
The annual inflation rate moderated to 3.3 per cent in May from 3.4 per cent in April. This was below the forecasted 3.4 per cent, suggesting a slight easing in price pressures.
The monthly inflation rate remained flat at 0.0 per cent, down from 0.3 per cent in April and below the expected increase of 0.1 per cent. This cooling was largely attributed to a decline in gasoline prices.
Excluding volatile food and energy prices, the core inflation rate increased by 3.4 per cent year-on-year, down from 3.6 per cent in April and lower than the anticipated 3.5 per cent.
Month-on-month, core inflation edged down to 0.2 per cent from 0.3 per cent, influenced by decreases in the prices of airline fares, apparel, and new vehicles.
The release of the CPI data comes at a critical juncture as the Federal Reserve’s Federal Open Market Committee (FOMC) concludes its two-day policy meeting.
The FOMC is widely expected to maintain the key federal funds rate in the range of 5.25 per cent to 5.5 per cent, the highest in over two decades.
However, the latest inflation figures might influence the committee’s rate path predictions for the remainder of 2024, especially as traders eagerly await the updated “dot plot,” which outlines Fed officials’ projections for future rate movements.
In March, the dot plot indicated that most Fed policymakers anticipated two to three rate cuts this year.
Wednesday’s softer inflation reading, however, could sway Fed officials to consider more than one rate cut by the end of 2024.
The CPI data, a crucial indicator of economic health, is closely monitored by investors and policymakers alike.
The U.S. central bank remains concerned about the persistence of inflation, even though it has decreased from a peak of 9.1 per cent in June 2022 to 3.4 per cent in April 2024.
The average CPI over the past six to eight months has hovered around 3.2 per cent. The Federal Reserve has made it clear that a rate cut will not be considered until inflation approaches the 2 per cent target, a level seen as necessary for long-term economic stability.
As the FOMC meeting concludes and Fed Chair Jerome Powell prepares to address the media, all eyes will be on the Fed’s policy statement and any changes to the economic outlook. (ANI)
ALSO READ: ‘Some of Hamas’ proposed changes workable’
