Consumer prices increased 8.5% in the 12 months ending in March.
The Washington Examiner reports:
“The war in Ukraine heavily influenced consumer prices in the month of March, nowhere more evident than the 18.3% monthly increase in gasoline prices,” said Greg McBride, Bankrate’s chief financial analyst. “Gas prices alone accounted for more than half of the monthly increase in the CPI, and over the past year, gas prices are up 48%. Food prices are also impacted, with food at home costs rising 1.5% just in the past month, further squeezing household budgets.”
The Federal Reserve announced last month that it would raise its interest rate target by a quarter of a percentage point, the first rate hike since 2018, in an effort to rein in the higher prices, although some economists and many Republicans say the central bank should have moved sooner to reverse its pandemic emergency measures.
Driven by hawkish statements by Fed Chairman Jerome Powell and other central bank officials, investors now expect the Fed to move much more aggressively with hiking interest rates in the coming months in light of the alarming numbers.
“The labor market is very strong, and inflation is much too high,” Powell recently said. “There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level and then to move to more restrictive levels if that is what is required to restore price stability.”
White House Press Secretary Jen Psaki said that the administration is bracing for “extremely elevated” inflation numbers.
Per The Hill:
“Because of the actions we’ve taken to address the Putin price hike, we are in a better place than we were last month,” Psaki said, indirectly referring to releasing additional oil from the Strategic Petroleum Reserve and calls for oil companies to avoid price gouging.
“But we expect March CPI headline inflation to be extraordinarily elevated, due to Putin’s price hike,” Psaki continued, saying the impact of energy prices will largely be to blame and that the fault lies in part with Russian President Vladimir Putin’s invasion of Ukraine.
“I will say that anytime there’s heightened monthly data or inflation reporting or numbers, it is a reminder to us, our allies on the Hill and hopefully to many of the American people that we need to do more to reduce costs for the American people,” Psaki said.
She pushed for Congress to pass the administration’s proposals on prescription drug pricing, child care and other areas that would reduce costs for families and help mitigate the effects of rising costs for energy and food.
