April’s Consumer Price Index (CPI) is forecast to rise to 5% over the previous year, estimates from Bloomberg suggest. This sees inflation remain well above the Federal Reserve’s 2% target.
While the Federal Reserve has been implementing an aggressive policy of interest rate hikes in its fight against inflation, the central bank risks sending the U.S. economy into a recession if it raises rates too high too quickly. As such, the Federal Reserve signaled last week that it could decide to pause its interest rate hikes, choosing to instead assess incoming data ahead of its next policy meeting in June before making a final decision.
For April, headline inflation is expected to be 5% on a year-on-year basis as well as 0.4% on a month-on-month basis. Core inflation, which excludes volatile costs of food and gas, is expected to be 5.5% year-on-year and 0.4% month-on-month.
Wells Fargo wrote in a note on Friday that it expects that inflation will cool down in the near term, however, the path to the Fed’s 2% target will take long to reach.