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U.S. consumer price surge in March kills rate cut hopes

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U.S. consumer prices surged more than expected in March, driven by higher gasoline and rental housing costs, prompting financial markets to anticipate a delay in Federal Reserve interest rate cuts until September.

The latest report from the Labor Department on Wednesday marked the third consecutive month of robust consumer price increases, challenging economists’ previous arguments that inflation spikes at the beginning of the year were merely temporary.

This announcement follows last week’s news of accelerated job growth in March, with the unemployment rate dropping to 3.8% from February’s 3.9%. However, the persistent rise in the cost of living poses a significant concern ahead of the November 5 presidential election.

Despite this, some relief was observed in stable food prices and declining motor vehicle costs, leading to a return of goods deflation.

Phillip Neuhart, Director of Market and Economic Research at First Citizens, commented, “The data does not completely remove the possibility of Fed action this year, but it certainly lessens the chances the Fed is cutting the overnight rate in the next couple of months.”

According to the Labor Department’s Bureau of Labor Statistics, the consumer price index rose by 0.4% last month, mirroring February’s increase. Gasoline prices climbed by 1.7%, while shelter costs, including rents, saw a similar 0.4% increase.

Gasoline and shelter costs accounted for over half of the CPI’s increase, while food prices rose by 0.1%. Notably, grocery food inflation remained unchanged, with declines in the costs of butter and cereals offsetting rises in prices for meats, eggs, fruits, and vegetables.

Low base

In the 12 months through March, the CPI surged by 3.5%, the highest increase since September, partly due to last year’s low base effect dropping out of the calculation. While this represents a decline from the peak inflation of 9.1% in June 2022, the trend of disinflation has plateaued in recent months.

Despite President Joe Biden’s call for corporations to use record profits to lower prices and his plan to tackle housing costs, market sentiment shifted after the data release.

Financial markets revised their expectations for the first rate cut to September from June, with only two rate cuts now expected instead of the previously envisaged three.

Minutes from the Fed’s March meeting expressed concerns that progress on inflation might have stalled.

The central bank has maintained its policy rate in the 5.25%-5.50% range since July, having raised it by 525 basis points since March 2022.

Charlie Ripley, Senior Investment Strategist at Allianz Investment Management, remarked, “The strong inflation data should force the Fed to go back to the drawing board with regards to their monetary policy ambitions for the year.”

Stocks on Wall Street declined, while the dollar strengthened against a basket of currencies. U.S. Treasury yields also rose in response to the news.

Excluding volatile food and energy components, the CPI increased by 0.4% last month, indicating that inflation remains manageable. Core CPI was boosted by rises in rents, motor vehicle insurance, and healthcare costs.

 

Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.

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Apple Music’s controversial top 10 albums of all time

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Apple Music has released its highly anticipated “100 Best Albums of All Time” list, with the top 10 rankings causing a bittersweet symphony of destruction for some music lovers.

The list was curated by a panel of experts and based on various factors including cultural impact, critical acclaim, and commercial success, with the aim to celebrate the most influential and timeless albums across genres.

As reported by the official Apple Music Newsroom blog post, the top ten best albums of all time are the following:

10. Lemonade (2016), Beyoncé

9. Nevermind (1991), Nirvana 

8. Back to Black (2006), Amy Winehouse

7. good kid, m.A.A.d city (2012), Kendrick Lamar

6. Songs in the Key of Life (1976), Stevie Wonder

5. Blonde (2016), Frank Ocean

4. Purple Rain (1984), Prince & The Revolution

3. Abbey Road (1969), The Beatles

2. Thriller (1982), Michael Jackson

1. The Miseducation of Lauryn Hill (1998), Lauryn Hill

In other news, Apple recently became the first company to hit a $3 trillion stock market value, before falling just below that milestone, as reported by Reuters.

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How can we support a more eco-friendly future?

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With a $23 million commitment for a national circular economy and $1.3 million for net zero transition guidance, Australia is advancing towards sustainability.

Funding Futures is a weekly TV show on Ticker, hosted by Mike Loder and Steven Maarbani from Venture Crowd, that delves into the dynamic and evolving world of venture crowd-raising.

In this episode, we are joined by Cameron Hope, Founder of CEO of Hirehood. #trends #funding futures

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The integral step to entering the property market

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In the debate surrounding housing affordability, a divergence emerges between media portrayals and stark realities. While the crisis is often depicted as insurmountable, critics argue that individuals tend to blame external factors rather than taking personal responsibility.

Despite challenges, advocates urge a shift from despair to possibility, emphasizing personal agency and proactive pursuit of homeownership goals. Thus, while acknowledging the hurdles, reframing the discourse empowers individuals to navigate the housing market with resilience and determination, making the dream of owning a home a tangible reality for those willing to seize it. #Trending #Featured

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