Inflation continues to re-accelerate, rising again in April according to personal consumption expenditures (PCE) price index data released by the Biden government on Friday. The PCE index, an important measure of inflation for the Federal Reserve, rose by 0.3 percent last month, meaning inflation remains stubbornly around three percent — still above the central bank’s two percent target.
“The longer you get the market inflation lingering close to 3 percent, the harder it is for the Fed to make a case for cutting rates. Certainly, there’s nothing in these numbers that advances the Fed’s rate-cutting idea,” Joseph Trevisani, a trader with FXStreet, told Reuters regarding the April PCE numbers. Annualized, the PCE has risen 2.7 percent since April of last year. Meanwhile, core inflation has increased by 2.8 percent, annualized.
Beginning in March 2022, the Federal Reserve engaged in an aggressive series of interest rate increases as inflation drastically spiked under Joe Biden. By July 2023, the central bank had raised interest rates by 525 basis points. However, the continued persistence of elevated inflation has prevented the Federal Reserve from lowering rates in recent months. An expected March rate cut was pushed back to June, and late last month, Fed chairman Jerome Powell signaled that the June cut would now not likely occur until September at the earliest.
Voter anger over high prices — driven by inflation — has dogged Joe Biden‘s re-election efforts. The 81-year-old Democrat incumbent has seen his approval ratings crater and falling support among critical Democratic minority and young voter demographics as voters continue to sour on his handling of the economy.
National Pulse previously reported that fast-food McDonald’s has acknowledged that its menu prices have risen upwards of 40 percent since 2019. Meanwhile, the cost of essential items and utilities has become prohibitive for many American consumers.
