"For the Fed, it's business as usual and there is not likely to be an acceleration in growth momentum that would cause them to shift their policy stance any time soon"
- Millan Mulraine, senior economist at TD Securities
Consumer inflation pressures eased in March, while industrial output in the U.S. fell, suggesting the Fed should continue its stimulus programme in order to boost growth in the world's largest economy. A gauge of consumer prices dropped 0.2% last month, down from a 0.7% gain in the month earlier, and below analysts' expectations, which called for a flat reading. The Federal Reserve said on Tuesday that the industrial production rose a seasonally adjusted 0.4% in March, compared with a 0.7% growth in the prior month, while February's growth was revised higher to 1.1% from the initially reported 0.8% advance. The signs of muted inflation pressures and slowing economic growth could bolster the case for the Federal Reserve to remain on its very easy monetary policy path for the longer period than preliminary was expected.
"For the Fed, it's business as usual and there is not likely to be an acceleration in growth momentum that would cause them to shift their policy stance any time soon," said Millan Mulraine, senior economist at TD Securities in New York.
"It remains our view that core inflation has peaked on a year-over-year basis and will be stable to slightly lower in coming quarters as soft global growth weighs on pricing power," said Josh Shapiro, U.S. economist at MFR Inc.
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