Reserve

Core

April

<p>US inflation finally fell below 5% for the first time in two years. In April, the rate reached 4.9%, remaining high but showing a significant decrease since the 40-year high of 9.1% in June last year. This is the tenth consecutive month that the inflation rate has declined.</p>
<h2 style="text-align: center;" id="lower-prices-for-goods-and-services">Lower Prices for Goods and Services</h2>
<p>Milk, airline tickets, and new cars saw a price drop, contributing to the decline in inflation. The Consumer Price Index (<a href="https://walletinvestor.com/magazinadmin/fed-official-calls-for-interest-rate-hike-to-combat-inflation/">CPI</a>) showed a 0.4% increase in the month, which is a lower growth rate compared to the previous month. Housing costs, used cars, and gasoline prices were the major factors contributing to the monthly increase.</p>
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">
<p lang="en" dir="ltr">US CPI for April 2023 YoY:</p>
<p>Expected: 5.0% <br />Actual: 4.9% </p>
<p>Will this make Powell stop interest rate hikes at the next FOMC meeting?<a href="https://twitter.com/hashtag/inflation?src=hash&amp;ref_src=twsrc%5Etfw">#inflation</a>  <a href="https://twitter.com/hashtag/CPI?src=hash&amp;ref_src=twsrc%5Etfw">#CPI</a> <a href="https://twitter.com/hashtag/NASDAQ100?src=hash&amp;ref_src=twsrc%5Etfw">#NASDAQ100</a> <a href="https://t.co/V6i7mZCREb">pic.twitter.com/V6i7mZCREb</a></p>
<p>&mdash; Klips (@OfficialKlips) <a href="https://twitter.com/OfficialKlips/status/1656275904136458244?ref_src=twsrc%5Etfw">May 10, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="us-inflation-compared-to-other-countries">US Inflation Compared to Other Countries</h2>
<p>In comparison, US inflation is lower than in other countries like the UK (10.1% in March) and the Eurozone (6.9%). Despite the downward trend, the Federal Reserve continues to raise interest rates to control<a href="https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Inflation#:~:text=Inflation%20measures%20how%20much%20more,known%20as%20%E2%80%9Cinflation%20hawks.%E2%80%9D"> price increases</a>.</p>
<h2 style="text-align: center;" id="central-bank-actions">Central Bank Actions</h2>
<p>The Fed has raised interest rates ten times since March last year, with Fed chair Jerome Powell suggesting a pause in rate increases to evaluate their impact. However, rates are expected to remain high as long as inflation persists at elevated levels.</p>
<h2 style="text-align: center;" id="challenges-persist">Challenges Persist</h2>
<p>Housing, petrol, and used car prices continue to rise, along with haircuts, veterinary visits, and gardening services. Core inflation, excluding food and energy prices, rose by 5.5% in the 12 months to April, still well above the Fed&#8217;s target rate of 2%.</p>
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">
<p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/CPI?src=hash&amp;ref_src=twsrc%5Etfw">#CPI</a> 10th Drop in a row! Consumer prices rose 4.9% in April from a year earlier, the slowest pace in 10 months.<a href="https://twitter.com/hashtag/Inflation?src=hash&amp;ref_src=twsrc%5Etfw">#Inflation</a> slowed in April, with the 12-month change in the Consumer Price Index (CPI) decelerating to 4.9% from 8.5% in March.<br />Core inflation, which excludes food and… <a href="https://t.co/LBazJ1nTOy">pic.twitter.com/LBazJ1nTOy</a></p>
<p>&mdash; InvestAnswers (@invest_answers) <a href="https://twitter.com/invest_answers/status/1656286146933166082?ref_src=twsrc%5Etfw">May 10, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="light-at-the-end-of-the-tunnel">Light at the End of the Tunnel</h2>
<p>Despite the challenges, experts believe the worst of inflation is behind us, with the rate now below 5%. However, inflation remains above the target level, and core inflation proves to be persistent. The Fed&#8217;s interest rate increases aim to slow economic activity and ease price pressures, and policymakers may soon pause the rate hikes.</p>
<p>In conclusion, US inflation has dropped below 5% for the first time in two years, but challenges remain. The Federal Reserve&#8217;s actions have helped control the inflation rate, but it will take more progress before declaring the mission accomplished.</p>

US Inflation Dips Below 5% for First Time in Two Years

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