De-escalation was marked in March inflation in the United States, hitting a two-year low. However, the upward trend in structural inflation continues to put pressure on fed for a possible increase in interest rates in May. In March, inflation is at the level USA was 5%, according to data released by the Bureau of Labor Statistics on Wednesday. For him, this is a serious blow. consumer price index compared to February, moving to the lowest levels since May 2021 (5%). On the other hand, structural inflation, which rules out volatility in energy and food prices, rose to 5.6%, up from 5.5% in February. In particular, according to published data, the core consumer price index rose 0.4% on a monthly basis last month after rising 0.5% in February. It should be noted that in February inflation was at the level of 6%, while analysts’ estimates in the Reuters poll indicated monthly growth of 0.2% and 5.2% year on year.

Rents have remained stubbornly high, supporting inflationary pressures and increasing the chances that the Fed will raise interest rates again next month. The annual consumer price index peaked at 9.1% last June, the biggest rise since November 1981, and inflationary pressures have been easing since then. However, inflation remains more than double the Fed’s 2% target. In fact, gasoline prices are likely to recover in the coming months as Saudi Arabia and other oil producers OPEC+ announced further cuts in oil production.

The inflation data came on the heels of last Friday’s employment report, which showed a solid pace of employment growth in March, with the unemployment rate falling to 3.5%. Persistently high inflation, a robust labor market and signs that financial crisis – as a result of the collapse of two regional banks set aside last month, they are expected to allow the Fed to continue to prioritize restoring price stability. Markets are now seeing a 25 basis point rate hike at the early May meeting.

Stefan Stanley, chief economist at Santander, told the Financial Times that the fact that structural inflation remains high clearly shows that “much work remains to be done” to move inflation to a more reasonable level. For his part, the President of the United States Joe Biden, following the release of the inflation data and ahead of the Fed’s meeting in early May, noted on Wednesday that the data showed “ongoing progress” in the fight to contain prices, but stressed that inflation was still quite high. It is worth noting that Fed officials still do not appear to have agreed on an imminent 25 basis point rate hike before announcing the end of historically more aggressive monetary tightening in an attempt to contain high inflation.