The Fed says price rise is temporary despite the biggest year-on-year rise since the 1990s
The US inflation gauge was a continuing measure by the Federal Reserve, which monitors price levels, marking the biggest year-on-year increase since the ’90s in April.
The news has generated further speculation about inflationary pressures.
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The Personal Consumption Expense Index, which avoids the use of more volatile energy and food prices, rose 3.1% in April from the previous year.
It was a sharp rise compared to the 1.9% increase in March, and also surpassed the consensus forecast by 0.2%.
Monthly, the Personal Consumption Expense Index rose 0.7% in April and 0.4% in the previous month.
This makes the core price index well beyond the Federal Reserve 2% target.
The Fed reaffirmed its view that it shows short-term trends, including stimulus packages and supply chain bottlenecks.
Fiona Cincotta, senior financial market analyst at City Index, says the Federal Reserve is expected to view PCE price jumps as temporary, rather than spurring them to raise interest rates. Masu.
“Core PCE, a measure of inflation that the Fed preferred, rose to 3.1% year-on-year in April, ahead of its forecast of 2.9% from 1.8% in March.”
“Futures were already trading above the release and barely responded to high inflation numbers.”
“Fed officials have consistently reassured the market that they are willing to watch throughout the period of high inflation that they consider to be temporary, which is a 13-year period with CPI of 4.2%. This was especially true after reaching highs of the .
“This significant increase in PCE inflation could make it even more difficult for the Fed to adhere to its incredible policies, but the market is not relevant for the moment. Usually, the Fed will move early. High-growth technology stocks dragged low by fear hold on profits. The US dollar is also rising.”
Energy prices rose 24.8% year-on-year, while food prices rose 0.9% year-on-year.
