Wall Street Wants Fed To Choke Price Increases

Persistent inflation remains the Federal Reserve’s No. 1 concern, even as the banking sector remains on edge after two big bank failures last month.

Photo Insert: The State Office in Washington D.C., United States (placed in the photo)

This week’s Consumer Price Index, due to be announced Wednesday at 8:30 am ET, could determine whether the central bank raises rates again in May, Nicole Goodkind reported for CNN.

That means it will also weigh on markets, especially now that Wall Street’s focus has shifted from the financial system to the economy. “Inflation is no less relevant than it has been for the past two years,” wrote Greg McBride, chief financial analyst at Bankrate.

“The Consumer Price Index remains the most-watched monthly economic report.”

Core inflation levels have eased for five months in a row on an annual basis, according to CPI readings, but they still remain near historic highs at 6% – well above the Federal Reserve’s goal of 2%.

Last month’s reading showed an increase in prices between January and February, which doesn’t “inspire confidence that 2% is just around the corner,” said McBride. For March, economists forecast a 0.4% monthly increase in the CPI, which matches the September - February average and would keep those year-over-year averages high.

“To feel good about where inflation is headed, we need to see more than just moderation in the rate of both headline and core inflation,” said McBride.

“We also need to see moderation in price pressures across a wide range of categories that are staples of the household budget: shelter, food, electricity, motor vehicle insurance, apparel, and household furnishings and operations.”

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