That’s down from March’s 3.5 percent level and slightly closer to the US Federal Reserve’s 2 percent target. On a monthly basis, inflation came in at 0.3 percent after stalling at 0.4 percent for the two previous months.
At an event in Amsterdam on Tuesday (May 14), Fed Chair Jerome Powell said it’s unlikely that more interest rate hikes are in the cards, although the central bank could leave them where they are. “I expect that inflation will move back down … on a monthly basis to levels that were more like the lower readings that we were having last year,” he noted.
Powell declined to comment on when rate cuts can be expected.
CPI is a factor the Fed considers when making rate decisions, but other indicators will provide the Federal Open Market Committee with a deeper understanding of the state of the economy ahead of its next meeting on June 11 and 12.
On the back of the CPI release, the gold price rose more than 1 percent in morning trading and inched closer to the US$2,400 per ounce mark, peaking at US$2,389.87 on Wednesday afternoon. The silver price also moved higher, gaining more than 3 percent to reach a high of US$29.72 during that same timeframe.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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