Economists said the U.S. inflation situation is likely to worsen for the next few months.
According to the Survey of Professional Forecasters that the Federal Reserve Bank of Philadelphia released on the 15th, the second-quarter (April–June) consumer price index (CPI) inflation rate is expected to be 6% at an annual rate. That is well above the previous forecast of 2.7%.
CNBC said the earlier survey was before the Middle East crisis, and that after the war pushed up energy prices, CPI projections were revised sharply higher.
The forecast for core CPI, which excludes volatile food and energy prices, came in at 3.2% for the second quarter. Likewise, it rose from the prior estimate of 2.8%.
Experts expected CPI inflation to be 3% in the third quarter this year. They expected it to ease to 2.5% in the fourth quarter.
The consumer and producer price indexes released for April were the highest in recent years. The CPI inflation rate was 3.8%, the highest in three years, and the producer price index (PPI) inflation rate was 6%, the highest since 2022.
With inflation concerns rising ahead of the inauguration of Kevin Warsh as the next chair of the Federal Reserve (Fed), there are growing views that it will be difficult for him to cut rates as he wishes. CNBC said, "As sentiment has formed among Federal Reserve Commissioners to hold rates for now while leaving the door open to future hikes, it appears Warsh will find it difficult to deliver rate cuts."