The U.S. consumer price index (CPI) in April posted the highest growth rate since May 2023.
The U.S. Labor Department said on the 12th (local time) that April CPI rose 3.8% from a year earlier. From the previous month, it increased 0.6%.
The monthly increase matched market expectations, while the annual increase was 0.1 percentage point higher than the market forecast.
However, core CPI, which excludes food and energy, rose 2.8% from a year earlier and 0.4% from the previous month. That suggests overall price volatility widened due to surging food and energy prices.
Energy prices rose 3.8% from the previous month, accounting for more than 40% of the overall CPI increase. Food prices climbed 0.5% from the previous month, with beef up 2.7% and fruits and vegetables up 1.8% by category.
Markets say April CPI is showing a stable trend in line with expectations, but they are also interpreting it as a sign that inflation is not easing. Because prices and inflation are firmer than expected, it could dampen expectations for interest rate cuts by the Federal Reserve (Fed).
Ira Jersey, a Bloomberg Intelligence rates strategist, said, "Inflation could keep short-term Government Bonds yields at elevated levels."