Hot inflation casts chill on bets for start to Fed rate cuts

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Prospects for a first Federal Reserve interest-rate cut before the end of summer took a body blow on Wednesday with another U.S. inflation report that cast into stark relief the stickiness of price pressures across the U.S. economy. After months of centering on June for the start of Fed policy easing, traders' bets are now squarely on the Fed's mid-September meeting for an initial rate reduction, after a third straight stronger-than-expected reading on consumer inflation sent financial markets into a fast retreat. Wednesday's report from the U.S. Department of Labor showed the consumer price index rose 3.5% year-on-year in March, an acceleration from the 3.2% rise in February. Core consumer price inflation, which strips out food and gas prices and is one measure economists use to gauge the stickiness of prices, rose 3.8% year on year, the same pace as in February. Traders are now betting the Fed will deliver a first quarter-point interest rate cut at its September 17-18 meeting, bringing the policy rate target to a 5%-5.25% range, and they see just one more rate cut by the end of the year.

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https://finance.yahoo.com/news/fed-seen-waiting-until-september-130551201.html