The United States records higher than expected inflation

The rise in consumer prices continued to accelerate in the United States during March, reaching 3.5% at an annual level compared to 3.2% in February, according to statistics published by the Department of Labor on Wednesday, which disappointed Once again, the hopes of analysts who had expected a smaller increase.

Its feared that the return of inflation acceleration in the United States will eliminate any possibility of the Federal Reserve making its first interest rate cut during its meeting scheduled for mid-June, a step that markets have been hoping for a long time.

However, the increase in consumer prices remained unchanged in one month at 0.4%, exactly the same as the previous month, while everyone was expecting a slight slowdown to 0.3%, according to Market Watch.

Core inflation, which doesn’t take into account fluctuations in energy and food prices and is therefore considered less volatile, remained unchanged during one year at 3.8%, while analysts had hoped that it would continue to gradually slow down, also within one month to 0.4% compared to February, although it was expected to record a slight slowdown.

The markets were negatively affected by the new numbers, as financial markets on Wall Street ended Wednesday’s trading with a decline.

The Dow Jones Index lost 1.09 of its value, while the Nasdaq fell by 0.84%.

US President Joe Biden said in a statement that “inflation has declined compared to its peak in June 2022, but there is still a lot of work to reduce the cost to families”.

He called on “companies, including consumer stores, to use their record profits to reduce prices”.

“We can rule out the possibility of an interest rate cut in June; The absence of progress towards the goal of limiting inflation to 2% has now become a trend,” Greg McBride, chief financial analyst at Bank Wright, said in a note.

He added, “There has been no improvement… We’re moving in the wrong direction, and the main problems remain”.