US inflation slows in April but remains high

The US monthly inflation rose by 0.3% in April from 1.2% increase previous month and annualized figure showed increase of 8.3% from 8.5% in March, signaling slowdown on consumer prices growth and generating initial signal that inflation has probably peaked.

More comprehensive and closely watched by the Fed core CPI rose by 0.6% in April after rising 0.3% in March, adding to expectations that the US central bank may opt for more aggressive step in June policy meeting.

Easing gasoline prices from their record highs were among the main contributors in April, however inflation is expected to remain high, as many analysts see a current slowdown as temporary, due to a number of factors that continue to boost consumer prices.

Fresh rise in gasoline prices after a short-lived drop, add to persisting factors that drive inflation higher, such as large amounts of money that governments pumped into the economies during the coronavirus pandemic crisis, continuous disruption in global supply chains and impact from the war in Ukraine.

High inflation strongly hit the US economy and the households and President Joe Biden said that fighting inflation will be his top domestic priority.

The US Federal Reserve, in its policy meeting last week, raised its interest rate by 50 basis points, the biggest rate hike in 22 years and signaled it will start to reduce its massive bond buying as from June, in attempts to cool soaring inflation, with a number of rate hikes towards the end of the year signaled by the US policymakers.