Inflation in prices in the USA unexpectedly accelerated significantly in March. Consumer prices rose by 3.5 percent compared to the same month last year, as the US Department of Labor in Washington announced. Analysts on average had expected a rate of 3.4 percent. In February it was still at 3.2 percent.

In a month-on-month comparison, consumer prices rose by 0.4 percent in March. An increase of 0.3 percent was expected here.

The core inflation rate remained at 3.8 percent. Economists had expected a decline to 3.7 percent. Compared to the previous month, core consumer prices rose by 0.4 percent.

“Fighting inflation remains a priority”

US President Joe Biden emphasized in a written statement that the inflation rate is now well below its peak, but that there is still a lot to do to reduce consumer prices. “The prices for housing and food are still too high,” admitted the Democrat. “Tackling inflation remains my top economic priority.”

The core rate is given particular attention by the US Federal Reserve Bank. According to experts, it reflects the general price trend better than the overall rate because components that are prone to fluctuations such as energy and food are excluded.

US Federal Reserve signals further interest rate cuts this year

The numbers are of great importance for the monetary policy of the US Federal Reserve, which has kept its key interest rates stable in recent months. The US Federal Reserve is now holding out the prospect of further interest rate cuts this year. “Almost all” members believe it would be appropriate to begin cutting interest rates “at some point” this year, according to the minutes of the March 20 interest rate decision. The decline in inflation rates is likely to continue in general. However, this process is expected to be uneven.

At its most recent meeting, the Fed once again kept its key interest rates stable and indicated cuts this year. Interest rate cuts are still expected on the financial markets as the year progresses.

However, the economic data published since the last meeting has recently dampened interest rate cut expectations. The latest labor market report was robust, and in March inflation data was again higher than expected. Recently, some representatives of the US Federal Reserve even completely questioned interest rate cuts later in the year.