Source: Sina Finance

Federal Reserve Chairman Powell sent a message last week that high interest rates will continue; the latest inflation data released on Friday reinforces this message.

The central personal consumption expenditure price index, which is the inflation indicator favored by the Federal Reserve, rose 0.3% month-on-month and 2.8% year-on-year in March. Government data showed that earlier this year's data was also slightly revised upward.

Worrying inflation data for three months in a row shows that US inflation has stagnated towards the central bank's 2% target, and indicates that the time for the first rate cut has been further delayed. Investors expect to cut interest rates only once or twice this year, starting in November, but are increasingly worried that the Federal Reserve may not reduce borrowing costs at all in 2024.

Nationwide analyst Ben Ayers said that this year's inflation data as of March is hot, and interest rates should not be cut in the first half of 2024. “There is also a risk that further economic resilience will delay interest rate cuts until 2025. This is a key downside risk for next year's economic growth.”

Powell said last week that if price pressure continues, the Federal Reserve can keep interest rates unchanged for “as long as necessary.”

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