Inflation is still too high. That probably won’t lead Federal Reserve policy makers to raise rates when they meet next month, but unless inflation comes down significantly in the months ahead, Fed policy makers will lace up their boots and start hiking all over again. And maybe inflation will come down. The Labor Department on Wednesday said that the consumer-price index, its measure of consumer prices, rose 0.4% in April from March, putting it 4.9% above its year-earlier level. Core prices, which exclude food and energy items to better reflect inflation’s underlying trend, also rose 0.4%, and were up 5.5% from a year earlier. … There were some aspects of the inflation report that will please the Fed. It has been focusing on what has been termed supercore inflation—the change in services prices excluding energy and housing costs. This is because, first of all, services prices are more closely linked to U.S. wages, as opposed to prices for goods, which are more driven by global demand, and which have been whipsawed by supply-chain problems since the pandemic started.
Source: WSJ.com: Markets
