Payam Javan: The Bureau of Labor Statistics reported a slight easing in the annual inflation rate for April, marking the first decline since January. The Consumer Price Index (CPI) dropped to 3.4 percent from March’s 3.5 percent, aligning with market expectations.

Core inflation, which excludes volatile energy and food prices, also decreased to 3.6 percent. Energy and shelter costs were the main contributors to the inflation increase, with gasoline prices up by 2.8 percent.

Despite recent declines in crude futures, oil prices remain high, with U.S. crude up by over 10 percent this year. Shelter costs, which account for a significant portion of CPI, rose by 0.4 percent, defying earlier forecasts of a decrease. The Federal Reserve is closely monitoring these trends, with Chair Jerome Powell expressing confidence in a future decline in shelter costs but uncertainty about the timing.

Meanwhile, wholesale prices surged by 0.5 percent, indicating potential future inflationary pressures. Market expectations for Fed policy have fluctuated, with investors uncertain about potential rate cuts amidst inflation concerns. The next Federal Open Market Committee meeting is scheduled for June 11 and 12.