ARLINGTON, Va.—On a seasonally-adjusted basis, overall consumer prices increased 0.3% in April. NAFCU Chief Economist and Vice President of Research Curt Long says the Federal Reserve will likely hold off on future rate hikes.
“Inflation rates remained subdued in April,” said Long in a new NAFCU Macro Data Flash report. “Rising gas prices are supporting headline inflation, but after stripping out energy and food, core prices have advanced just 0.1% in each of the past three months. PCE inflation – the measure preferred by the Fed – registered just 1.5% in March, and the core figure was only slightly higher.
“Both readings are well below the Fed's 2% target rate, a chief reason why the Fed has elected to pause rate hikes,” continued Long. “It is likely the Fed would be patient even with figures that were modestly above that level, as officials have said that they are willing to accept above-target inflation for a time given the lengthy period that price growth has failed to meet that mark. NAFCU continues to see no foreseeable reason to expect a rate hike this year.”
CPI Up by 2% Over Year
According to new data published by the Bureau of Labor Statistics, the overall CPI grew 2% over the 12-month period.
Core prices (excluding food and energy costs) increased 0.1% in April compared to the previous month. Year-over-year core CPI growth was 2.1%.
Energy prices increased 2.9% in April following a 3.5% increase in March. From a year ago, energy prices were up 1.7%. Food prices fell 0.1% in April. On a year-over-year basis, food prices were up 1.8%, Long said.