Shelter and gasoline costs continued to drive price growth, making up 70% of the overall CPI increase, according to the Department of Bureau and Labor Statistics.
Fed officials have sounded a cautious note on the prospect of rate cuts later in the year, with chair Jerome Powell reiterating on Tuesday that the central bank “did not expect this to be a smooth road” and noting that recent inflation readings have come in higher than anticipated.
In its last decision on interest rates, which saw the federal funds rate remain on hold for the sixth consecutive announcement, the Fed cited “a lack of further progress” towards its inflation objective as a reason for rates remaining where they are.
Inflation remains well above the Fed’s target rate of 2% but has fallen significantly from its 9.1% peak in the middle of 2022, a figure that marked its highest level for around 40 years.
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