US inflation surprisingly slows further – interest rates likely to rise

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Inflation in the US eased slightly in April – some experts surprised. The central bank had already cut the inflation rate by a full percentage point in the previous month.

WASHINGTON – Inflation in the US continues to fall surprisingly. The inflation rate for goods and services rose only 4.9 percent in April after 5.0 percent in March, the Labor Department reported in Washington on Wednesday. Experts polled by Reuters had expected the reading to be flat after inflation eased a full point in March.

The Bank of New York has not ruled out further increases in interest rates

U.S. Federal Reserve Building: Surprisingly, inflation in the U.S. has again eased marginally. © Ting Shen / dpa

The US Federal Reserve has raised interest rates from near zero to a range of 5.00 to 5.25 percent starting in early 2022. Last month it came a small step closer to the inflation rate target of 2.0 percent.

At the same time, it is suffering from stubbornly high core inflation, which excludes volatile energy and food prices. It declined to only 5.5 percent in April after 5.6 percent in March. John Williams, the influential head of the New York Federal Reserve District, recently did not rule out that interest rates could rise further – even though the central bank has recently signaled a willingness to pause. ((Reuters, left)

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