The Clap March’s 2022 U.S. consumer price index (CPI) rose to 8.5% year-over-year (YoY), after recording 7.9% the month before.
Main drivers Soaring food & gasoline prices were the major drivers behind the jump, as they recorded 8.8% & 32% jumps, respectively. Core prices, which exclude food & energy prices because of their relatively high volatility, jumped 6.5% YoY.
Why this matters Inflation doesn’t seem to be slowing down, which the Fed has been expecting. March’s CPI figure further strengthens the case for a 0.5% interest rate hike in the next Federal Open Market Committee (FOMC) meeting.
While some economists believe inflation is nearing its peak, it’s still a long distance away from the Fed’s 2% target, & there’s a lot of work to be done. If the Fed raises rates too quickly, it risks tipping the economy into a recession.