The report signaled that inflation continues to slow with consumer prices barely rising in March and gasoline prices dropping

This week saw US CPI declining nine month in a row. Thanks to David Kindley from Orbex, we can have a detailed look at the release.

✕

FXMAG.COM: Could you please comment on the US CPI after it's released?

David Kindley (Orbex): The US Consumer Price Index (CPI) dropped for the ninth consecutive month in March to its lowest level since May 2021. Specifically, consumer prices overall increased 5% year over year, down from 6% in February and from a 40-year high of 9.1% last June, according to the latest release by the US Labor Department.

Core inflation is still at a much higher level than the Federal Reserve’s target inflation rate of 2%

David Kindley (Orbex): The report signaled that inflation continues to slow with consumer prices barely rising in March and gasoline prices dropping. That being said, core inflation is still at a much higher level than the Federal Reserve’s target inflation rate of 2%.

Read next: EM Sovereigns: IMF remains cautious on World Economic Outlook| FXMAG.COM

David Kindley (Orbex): While there are forward-looking signs that suggest inflation will slow further in the coming months, market consensus is that the Fed is still likely to increase key rates by another 25 basis points at its May 2-3 policy meeting. Should the Fed decide not to raise rates at their upcoming meeting, stock markets are likely to edge higher as this would signal an end to the Fed’s aggressive hiking cycle. For reference, the Fed has hiked its policy rate by 475 basis points since last March from a near-zero level to the current 5.00% rate.