Fed: US inflation up, keeps Fed tilted towards another hike


US inflation and consumer spending have accelerated over the past month, highlighting ongoing price pressures and demand that will prompt Federal Reserve policymakers to raise interest rates further.
Personal consumption expenditure (PCE) price index, one of the fedFigures from the US Commerce Department on Friday showed that the US government’s favorite inflation indicators rose faster-than-expected by 0.4% in April. Compared to the previous year, the value increased by 4.4%.
Excluding food and energy, the so-called core PCE index rose by 0.4% month-on-month and by 4.7% compared to April 2022, also beating forecasts. Price-adjusted consumer spending rose 0.5% after flat in March. The gain was the strongest year-to-date and reflected gains in both goods and services.
While inflation has moderated since its peak a year ago, there is a risk that price pressures will remain elevated on the back of resilient household demand. That’s the challenge facing Fed officials as they debate whether to pause their rate hike campaign and assess the impact of tighter policy on the banking system and the broader economy.

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