US inflation still too high: interest rate cuts delayed

The first US interest rate cut is unlikely to occur until September. Will the ECB wait for the Fed's decision or will it cut rates in June?

the Inflation in the United States of America It is rising strongly again, thus likely delaying the interest rate shift that financial markets have been craving for several months.

Consumer prices rose in the United States March compared to the same month last year by 3.5 percentAfter 3.2 percent in February. Economists polled by Reuters had expected only 3.4 percent.

According to these data, financial markets have buried the hope that A First interest rate cut The US Federal Reserve is scheduled to hold its meeting in June. Now it will just be for September Expected: The probability of this is estimated at 74 percent.

There are also no signs of a decline in the inflation trend, to which the central bank pays close attention to the so-called: Core inflationThe inflation rate, which excludes volatile energy and food prices, remained steady at 3.8% in March. Experts had expected this decline.

Meanwhile, the European Central Bank is keeping interest rates steady

On Thursday, the European Central Bank will also discuss key interest rates. According to economists, the European Central Bank is unlikely to change its key interest rate. European Central Bank President Christine Lagarde However, a rate cut is likely to be indicated for June. This will be the fifth time in a row that the central bank does not change interest rates.

The European Central Bank raised interest rates sharply to combat high inflation. However, inflation in the Eurozone has recently declined further. In March, the inflation rate fell to 2.4 percent. In the fall of 2022, it reached a record level of 10.7 percent. The central bank targets an interest rate of 2.0% in the medium term.