US inflation tracked sideways in April, a worrying sign for the US’ central bank, as it suggests that the elevated pace of price increases could last longer than expected and casts doubt on how soon it would be able to cut interest rates.
The personal consumption expenditures (PCE) price index increased by 0.3 percent last month, the US Department of Commerce’s Bureau of Economic Analysis said yesterday, matching the unrevised gain in March.
In the 12 months through April, the PCE price index rose by 2.7 percent after advancing 2.7 percent in March.
Photo: Bloomberg
Economists polled by Reuters had forecast it would climb by 0.3 percent for the month and 2.7 percent on a year-on-year basis.
The PCE price index is one of the inflation measures tracked by the US central bank for its 2 percent target. Monthly inflation readings of 0.2 percent over time are needed to bring inflation back to target.
The US Federal Reserve has kept its benchmark policy rate in the 5.25 to 5.50 percent range for the past 10 months and was stung by three months of stronger-than-expected inflation and labor market readings from January to March after more encouraging readings in the fourth quarter of last year.
However, readings for monthly April job gains and the consumer price index (CPI), another closely-watched inflation gauge, earlier this month appeared to provide some relief for the Fed.
US job growth was at the lowest level in six months and the CPI increased less than expected.
The Fed has raised borrowing costs by 525 basis points since March 2022 in a bid to cool demand across the economy.
Financial markets initially expected the first rate cut to come in March, which then got pushed back this month and now to September.
Consumer spending, which accounts for more than two-thirds of US economic activity, increased by 0.2 percent, down from a 0.7 percent rise in March.
Consumer spending moderated from a brisk 3.3 percent pace in the October-to-December period to 2.0 percent in the first quarter, revised GDP data released on Thursday showed.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS