May 15, 2023 — Inflation Cools Slightly in April


US inflation eased to its lowest level in 5 years, the consumer price index came in at 4.9 percent for April following a 5 percent increase in March. The figure was below analysts’ expectations and is the tenth consecutive month of declines in the year-over-year growth rate. Core CPI (excluding energy and food) was up 0.4 percent from March, and up 5.5 percent for the year, down from 5.6 percent last month.

The Fed has been frustrated since 2022, enacting 10 consecutive interest rate increases in attempts to quell persistent inflation. They have raised the benchmark rate to the highest it has been in nearly 16 years. The April report is good news, though “super core inflation”, that also excludes housing, was up slightly from March.

Following the release of the inflation data, traders have lowered the likelihood of another Fed rate increase to occur at the June meeting to 20 percent. The Fed stated at their May meeting that future rate increases will be data-driven.