The Federal Reserve is likely to maintain a “wait and see” approach to interest rates after April’s Consumer Price Index (CPI) revealed sticky inflation despite some cooling signs.
Core inflation (excluding food and energy) remained at 2.8% year-over-year for the second consecutive month, substantially above the Fed’s 2% target.
Monthly core inflation rose 0.2%, higher than March’s 0.1% but below expectations. Experts from Morgan Stanley and Bank of America believe President Trump’s tariffs haven’t yet fully materialized in inflation data, with impacts expected to appear in May or June figures.
Investors continue to predict the Fed will hold rates steady through June and July meetings, with a potential first rate cut in September.