Consumer price increases remained high last month, boosted by gas, rents, and car insurance, the government said Wednesday in a report that will likely give pause to the Federal Reserve as it weighs when and by how much to cut interest rates this year. Prices outside the volatile food and energy categories rose 0.4 percent from February to March, the same accelerated pace as in the previous month. Measured from a year earlier, these core prices were up 3.8 percent, unchanged from the year-over-year rise in February. The Fed closely tracks core prices because they tend to provide a good read of where inflation is headed.
The March figures, the third straight month of inflation readings well above the Fed’s 2 percent target, threaten to torpedo the prospect of multiple interest rate cuts this year. Fed officials have recently made clear that with the economy healthy, they’re in no rush to cut their benchmark rate despite their earlier projections that they would reduce rates three times this year. Read more