-Robert Sinche, global strategist at Amherst Pierpont Securities LLC
US consumer price inflation continued to rise in March, signalling inflation is starting to firm. The Labor Department said the Consumer Price Index climbed 0.2% month-on-month during in March, following the same growth seen in February. The cost of living in the US excluding food and fuel ticked up 0.2% in the reported period for a third consecutive month. Back in February, the measure rebounded from its largest drop since December 2008, as it trashed 0.7% in the beginning of the year. January booked the third month in a row of decline in the index. On an annual basis, inflation in the US recorded a 0.1% fall during the reported month, compared to the flat reading in February.
A separate PCE reading, a closely watched inflation gauge by the Fed, continued to show a lukewarm growth. The latest headline PCE price index annual rate was 0.1% higher, against expectations for a rise of 0.2%. Personal spending declined 0.2% in January. The core PCE price index rose at an annualized rate of 1.4%, overshooting forecasts for 1.3%, after climbing at a rate of 1.3% in January. The Fed uses core PCE as a tool to help determine whether to hike or cut interest rates, with the aim of keeping inflation at a rate of 2% or below.
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