The news that consumer prices rose a relatively modest 0.3 percent in March from February supports “the view the U.S. Federal Reserve has room to provide more support for the economy if needed,” Reuters concludes. It adds that:
“The U.S. Federal Reserve has said it will probably hold interest rates super low until at least late 2014 to help the economy, which is limping back from the 2007-2009 recession. The central bank is charged with keeping inflation low while promoting full employment. The next policy meeting is scheduled for April 24-25.
“Amid recent signs of weakness in the labor market, investors are betting the Fed could unleash further monetary stimulus to boost growth, although comments by Fed officials this week suggested the central bank is on hold as it waits to see whether the recovery gains traction.”
According to the Bureau of Labor Statistics, consumer prices were up 2.7 percent in the 12 months ended March 31.