Falling energy prices and favourable base effectspushed the annual CPI inflation rate down to a 12-month low of 2.3% in April, from 2.7%. Headline CPI inflation will fall below 2.0% over the next few months, possibly even to 1.5%, but core inflation remains stuck above that 2.0% target, which will make it harder for the Fed to justify any further monetary easing should economic growth appear to be stalling. Thankfully, this morning's news on real activity was, on the whole, encouraging.
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