US inflation outpaces Wall Street forecasts, Fed’s rate cut dashes hope for investors

Expectations of a US Federal Reserve interest rate drop in June were dashed after gasoline and housing costs drove an unexpected surge in US inflation in March 2024. According to data provided by the Labor Department’s Bureau of Labor Statistics on Wednesday, April 10, the US consumer price index (CPI) increased by 0.4% sequentially, exceeding Wall Street projections.

Following a 3.2 percent gain in February 2024, the CPI grew by 3.5% YoY in the 12 months ending in March. These core prices were up 3.8% when compared to a year ago, which was not different from the YoY increase in February. The greatest economy in the world’s inflation forecast is provided by the Fed, which keeps a careful eye on core prices.

In a poll of economists by Dow Jones Newswires and The Wall Street Journal, it was predicted that the CPI will increase by 0.3% month over month and by 3.4% annually.

Between February and March, gas prices increased by 1.7%, while apparel expenditures increased by 0.7%. The average cost of auto insurance increased 2.6% last month and is now 22% higher than a year ago, partially due to higher-priced vehicle purchases. However, the cost of groceries remained the same last month and increased by 2.2% over the previous year.