economy
Inflation reading Tuesday expected to show prices at nearly a three-year high
April's consumer price index, a broad gauge of goods and services costs across the U.S. economy, is forecast to reach an annual rate of 3.8%.
TL;DR
- The April consumer price index is forecast to reach an annual rate of 3.8%, the highest since May 2023.
- A 0.6% monthly price jump is expected, driven by the ongoing oil shock and spreading to transportation and warehousing costs.
- Concerns are rising that markets are underestimating current inflation and its potential persistence.
- Core prices, excluding food and energy, are also expected to move higher, increasing the monthly forecast to 0.3% and the annual gain to 2.7%.
- The Federal Reserve faces a precarious position with rising inflation, a stable labor market, and a deteriorating U.S. fiscal situation.
- There's a risk of rate hikes, which could negatively impact markets similarly to the post-Covid inflation surge.
- The market may be underpricing the risk of Fed rate increases.