Eggs-traordinary Times: U.S. Inflation Cools Down, But the Federal Reserve Isn't Scrambling Just Yet!

Wednesday, April 12, 2023   /   by Fahad Karamat

Eggs-traordinary Times: U.S. Inflation Cools Down, But the Federal Reserve Isn't Scrambling Just Yet!

When it comes to U.S. inflation, it's not all about the Benjamins. Sometimes, it's about the eggs! Recent data paints a brighter picture of U.S. inflation, with egg prices playing a significant role. But will the Federal Reserve whisk things up with another interest rate hike?

A Dive into the Numbers

As they say, numbers never lie, and in March, the story they tell is one of cooling down. U.S. inflation saw its lowest level in nearly two years, with the consumer-price index ticking up by only 5% year-over-year. A welcome change, considering February's 6% ascent. This moderation was fueled by drops in grocery, gasoline, medical care, and utility costs, though frequent fliers and insurance hunters might still be feeling the pinch with high prices.

Peeling Back Layers: The Core Inflation Narrative

Strip away the volatile food and energy prices and you get core inflation. At 5.6% YoY in March, it's a subtle nudge up from February's 5.5%. Shelter costs are the main culprits behind this stubborn inflation persistence.

Federal Reserve's Playbook: To Hike or Not to Hike?

With whispers of a potential recession in the corridors of Wall Street and the ongoing inflation saga, all eyes are on the Federal Reserve. They've already pulled the rate hike trigger nine times in the past year, nudging the federal funds rate between 4.75% and 5%. The question on everyone's lips? Will May see another hike?

Economic Checkpoints on the Fed's Radar

The recent banking stresses, coupled with signals from the labor market and consumer spending metrics, will heavily influence the Federal Reserve's next move. Hiring's slowed down a bit, wage growth's taken a breather, and job openings have dwindled, indicating a softening demand for workers.

Eggs, Cars, and Gasoline: The Price Rollercoaster

In a turn of events reminiscent of an epic comeback story, grocery prices dipped in March, led by our breakfast heroes – the eggs. Their prices plummeted, recording the most significant monthly drop since the late '80s. This decline was primarily because of last year's spike owing to the Avian-flu outbreak. And for those hitting the roads, gasoline became a tad cheaper, while new cars saw a price ascent, leaving used ones in the rearview with declining costs.

While it's too early to break out the champagne, the moderation in U.S. inflation is a positive sign. However, the path forward is sprinkled with uncertainties. Whether the Federal Reserve decides to raise interest rates in May remains to be seen. One thing's for sure: in the glamorous world of economics, it's not just stocks and bonds that make headlines; sometimes, it's the humble egg! Cheers to that!

  news, interest rate, fed, inflation

California Platinum Realty
Fahad Karamat
6303 Owensmouth Ave 10th Floor
Los Angeles, CA 91367
CA DRE # 02007521
NMLS # 1597279

LaCountyHomeListings and California Platinum Loans Partnership Logo.png

Based on information from the Golden Empire MLS, Inc./Association of REALTORS® as of May 24, 2024. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. Information deemed reliable, but not guaranteed. Copyright Golden Empire MLS, Inc. 2021.
Based on information from California Regional Multiple Listing Service, Inc. as of May 24, 2024. This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate professionals. Information from sources other than the Listing Agent may have been included in the MLS data. Unless otherwise specified in writing, Broker/Agent has not and will not verify any information obtained from other sources. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
This site powered by CINC: