Economists Warn Sticky Inflation Could Limit Fed Rate Cuts This Year

Odaily Planet Daily reports that economists expect the recent jump in U.S. gasoline prices to show up clearly in major inflation readings due this week. March CPI is forecast to rise 1% month over month, the largest monthly gain since 2022, while core CPI is expected to increase 0.3% month over month. Earlier, the war in Iran drove prices at U.S. gas stations up by about $1 per gallon. A day before the CPI release, the Fed's preferred inflation gauge will offer a look at price pressures before the conflict. Economists project the core PCE price index rose 0.4% in February for a third straight month, indicating the earlier cooling trend toward more moderate inflation had already stalled even before the war. With the U.S. labor market showing signs of stabilization, price pressures remaining elevated, and fresh inflation risks stemming from the Middle East war, economists say the Fed could face difficulty cutting rates this year. (Jin10)