BREAKING: Inflation surges 8.5% in March, hitting a new 40-year high
-induced disruptions in the economy, while Republicans have pinned it on the president's massive spending agenda and his energy policies targeting the oil and gas industries.
The data will also have major implications for the Federal Reserve, which has taken a more hawkish approach to fighting inflation in recent months: Policymakers raised rates by a 0.25 percentage point in March, and have since signaled support for a faster, half-point increase at their May meeting. "Many participants noted that one or more [0.5-point] increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified," the Fed minutes from its March meeting said.
The biggest question now is whether central bank officials can successfully tame inflation and stabilize prices without triggering an economic recession. Raising the federal funds rate tends to create higher rates on consumers and business loans, which slows the economy by forcing them to cut back on spending.
Chairman Jerome Powell has pushed back against concerns that further tightening by the central bank will trigger a recession and has maintained optimism that the Fed can strike a delicate balance between taming inflation without crushing the economy.
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