In a significant development, the latest data from the Bureau of Labor Statistics reveals a slowdown in US consumer price growth for the month of April. The Consumer Price Index (CPI) posted a modest 0.3% increase over the previous month, marking a slight deceleration from March's figures. Annual inflation stood at 3.4%, in line with economist expectations but slightly lower than the previous month's 3.5% gain.
Of particular note, core inflation, which excludes the volatile costs of food and gas, also exhibited a slowdown, hitting its lowest level this year. Core prices rose by 0.3% over the prior month and 3.6% over the previous year, meeting economist forecasts but indicating a cooling trend compared to March's data.
Market Reaction: Stock Futures Rise, Bond Yields Fall Following the release of the CPI data, stock futures have surged, signaling a continuation of this month's market rally. Conversely, bond yields have experienced a notable decline, reflecting increasing expectations among investors that the Federal Reserve may implement rate cuts later this year. Two-year Treasury yields, which are particularly sensitive to near-term Fed actions, dropped by eight basis points to 4.73%, underscoring the market's anticipation of monetary policy adjustments.
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