Washington—US consumer inflation continued to accelerate last month, according to government data published Wednesday, reducing the chances of an early interest rate cut from the Federal Reserve in a tense election year.
The data raised the likelihood that the first Fed rate cut will come right before November’s presidential vote, which would thrust the independent US central bank into the middle of a fractious fight between President Joe Biden and his likely opponent, former president Donald Trump.
The annual consumer price index (CPI) came in at 3.5 percent in March, up 0.3 percentage points from February, the Labor Department said.
This was slightly above expectations of a 3.4 percent rise, according to a survey of economists conducted by Dow Jones Newswires and The Wall Street Journal.
Monthly inflation came in at 0.4 percent, also slightly above expectations.
Wall Street stocks retreated on Wednesday, while the yield on 2- and 10-year US Treasuries jumped higher as traders digested the prospect of a later start to rate cuts.
“We have dramatically reduced inflation from nine percent down to close to three percent,” President Biden told reporters in Washington on Wednesday.
“We’re in a situation where we’re better situated than we were when we took office where inflation was skyrocketing, and we have a plan to deal with it,” he added.