From CNBC: 2024-04-10 15:29:09

The US Federal Reserve Chair, Jerome Powell, attended a “Fed Listens” event in Washington, DC, on October 4, 2019. Markets were shaken by the hotter-than-expected consumer price index reading, with particular focus on the supercore inflation gauge. Supercore inflation accelerated to a year-over-year pace of 4.8% in March, the highest in 11 months, raising concerns for the Federal Reserve.

The core CPI, which excludes volatile food and energy prices, along with the supercore gauge, are key indicators for economists to determine true inflation trends. Federal Reserve officials are grappling with the challenge of elevated housing inflation, which they see as temporary. However, the supercore inflation rate, if annualized, is over 8%, far exceeding the central bank’s 2% goal.

The Consumer Price Index (CPI) rose by 3.5% year-over-year last month, exceeding expectations. This data led to a drop in equities, higher Treasury yields, and a shift in futures market traders’ expectations for the first rate cut by the Federal Reserve to September from June. Market participants are concerned about the sustained rise in inflation and its impact on the economy, questioning the Fed’s ability to bring inflation back under control.

Read more: The ‘supercore’ inflation measure shows Fed may have a real problem on its hands