On Wednesday, the 10th of April 2019, there had been a bunch of mixed US data released from the US Labor department, while US Consumer prices had surged to a 14-month high last month, yet an underlying inflation had kept questioning whether further debarkations of a benign inflation threat had been advancing at a closer distance amid a sluggish global and local economic growth.
The US Labor department had revealed a basket of mixed data as beforementioned on Wednesday (April 10th), which appeared to be highly supportive for the Federal Reserve’s decision to remain “patient” this year while hiking interest rate further.
Besides, after today’s (April 10th) FOMC minutes, which remained as dovish as it had been since the beginning of the year, skepticism of a rate hike in a near-term outlook became more dominant amid an underlying inflation trend.
Apart from that, analysts had started to bet on an interest rate cut later this year, if current economic trend kept resurfacing on a frequent basis. According to the US Labor Department, US Consumer Price Index had risen by 0.4 percent last month, buoyed mostly by an increased cost of foods, gasolines and house rents, while US consumer price index except food and energy sector had been down to 2.0 percent from last month’s 2.1 percent, indicating an imminent contraction casting shadows over US economy, an economic indentation identical to other parts of the world.
In fact, CPI or Consumer price index serves as a strong indicator for inflation, while a higher inflation indicates a decline of purchasing power of currency. Citing Wednesday’s (April 10th) data as a solid reflection of a timid inflation, the chief economist of Naroff Economic Advisors in Holland, Pennsylvania, Joel Naroff said, “For the most part, inflation remains tame. The Fed effectively went on vacation and is likely to stay there for quite a few more months”.