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When Will US Inflation Finally Drop? Consumers Are Worried after New Data

Everything is more expensive than it used to be- from gas to groceries and everything in between. Americans are wondering when it will ever change.

They are tired of rising prices and more bad news about the economy and inflation. The latest consumer price index numbers do not paint a rosy picture either, with CPI up by 3.5% from the previous month.

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That is actually higher than expected, and it puts the US market in a tough position. We are already seeing an effect trickle down to commodities and stock markets as well as cryptocurrency markets.

Core inflation us up as well, by 3.8%, and this indicator uses the same data as CPI but removes food and energy statistics.

CPI rates have increased for five months in a row at this point, and that means that inflation is trending up and may continue to do so. This creates a trading market that is hesitant to invest, where trades are small and measured.

What Will Help Inflation?

The Federal Reserve is attempting to do its part to halt inflation. They are holding off on interest rate cuts for now. The Federal Reserve minutes for March are set to be released later today, and they will probably reveal that the Fed is not issuing interest rate cuts at this time. They likely will not set a date for those cuts either until they see inflation indicators diminishing.

Consumer confidence is a good indicator that inflation is improving. If consumers are spending more and are buying more big ticket items, that shows that they are less fearful about the economy. Durable goods reports showed that spending on these items was up 1.4% last month. Inflation fears will keep people from investing much money and spending their money, as they will tend to hoard it instead. That contributes to higher inflation, as it demonstrates a timid economy that will have a tough time coming out of high inflation.

This circular process makes it hard for inflation levels to go down, which is why it is up to the government, most times, to make changes that spur an inflation decrease and increase consumer spending. At the same time, they will need to relieve some of the pressure that consumers feel and help alleviate some of their fears.

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ABOUT THE AUTHOR See More
Timothy St. John
Timothy St. John
Financial Writer - European & US Desks
Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.
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