U.S. consumer prices rose more than expected in March, according to the latest data from the Bureau of Labor Statistics released Wednesday morning.
The consumer price index (CPI) in March increased by 0.4% from the previous month and by 3.5% from the previous year, accelerating from the annual rate of increase of 3.2% in February. This data was consistent with February's month-on-month increase.
Both indicators beat economists' expectations for a 0.3% monthly increase and a 3.4% annualized increase, according to Bloomberg data.
The hot print complicates the Fed's next move on interest rates as the central bank seeks to return inflation to its 2% target. Fed officials classify the path to 2% as “steep.”
Investors now expect about three 25-basis point rate cuts this year, up from the six expected at the beginning of the year, according to Bloomberg data.
On a “core” basis, which excludes volatile food and gas prices, prices in March rose 0.4% from the previous month and 3.8% from a year earlier, consistent with February's data. Both indicators exceeded economists' forecasts for an increase of 0.3% from the previous month and an annualized rate of increase of 3.7%.
alexandra canal I'm a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, Email alexandra.canal@yahoofinance.com.
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