Core inflation in the US continued to rise in March, bolstering expectations that interest rate hikes would continue in the next month. Headline inflation, on the other hand, under left.
According to data from the US Department of Labor, headline inflation increased by 0.1 percent on a monthly basis and decreased from 6 percent to 5 percent on an annual basis. Monthly inflation increased by 0.4 percent in February.
The median estimate of economists surveyed by Bloomberg was 0.2 percent monthly, 5.1 percent year-on-year.
Core inflation increased by 0.4 percent on a monthly basis, in line with forecasts, compared to 0.5 percent in the previous month.
Core inflation continued to increase on an annual basis and became 5.6 percent, compared to a 5.5 percent increase in the previous month. The expectation was 5.6 percent.
These figures showed that ‘sticky inflation’ continued, especially in the service sector. While the effect of the recent turmoil in the banking sector on the economy was closely followed by policy makers, the increase in inflation and the strong employment market strengthened the view that the Fed would raise interest rates at least once more and then wait.