April 2022’s U.S. consumer price index (CPI) rose to 8.3% year-over-year (YoY), after recording 8.5% the month before.
The main drivers
On a yearly basis, energy costs were up 30.3% while food rose 9.4%. Core inflation, which strips out the volatile energy & food baskets, rose 6.2% in April 2022 as opposed to a 6.5% rise in March 2022.
It’s slowing down!
Yeah, but it’s still way too high. Remember, the Fed’s inflation target is 2% over 12 months. What April’s CPI may suggest is that inflation may have peaked, but Economists believe it’ll remain high for several months.
The Fed is poised to raise interest rates in its June & July meetings, both expected to be 0.50% hikes. It’s also expected to continue raising rates in following meetings in 2022, but at a slower pace.