Consumer price increases remained high last month, boosted by gas, rents and car insurance.
Consumer inflation remained persistently high last month, boosted by gas, rents, auto insurance and other items, the government said Wednesday in a report that will likely give pause to the Federal Reserve as it weighs when and by how much to cut interest rates this year.
On Wall Street, traders sent stock futures tumbling and bond yields rising, reflecting fear that the Fed may delay interest rate cuts indefinitely. Gas prices surged 1.7% from February to March and clothing costs 0.7%. The average cost of auto insurance jumped 2.6% last month and is up a dramatic 22% from a year ago, partly reflecting purchases of higher-priced vehicles.
Early this year, Wall Street traders had projected that the Fed would cut its key rate up to six or seven times in 2024. In March, Fed officials signaled that they envisioned three rate cuts. But elevated inflation readings for January and February - along with signs that economic growth remains healthy - led several Fed officials to suggest that, and the unemployment rate fell to a low 3.8% from 3.9%.
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