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The Wall Street Journal reports that "the consumer-price index, a closely watched inflation gauge that measures what consumers pay for goods and services, rose 5% last month from a year earlier, down from February’s 6% increase and the smallest gain since May 2021, the Labor Department said Wednesday.

"Consumers saw lower prices last month for groceries, gasoline, medical care and utilities and high prices for shelter, airline fares and insurance, the department said."

Despite the easing of inflation, the Journal writes, "underlying price pressures likely keep the door open for the Federal Reserve to consider another interest-rate increase at its May meeting."

Analysis from the New York Times:

"Taken in total, the fresh inflation data suggested that price increases were meaningfully moderating, but that progress remained gradual. And that mixed signal comes during a challenging economic moment for the Fed. The central bank is the government’s main inflation fighter, and it has been trying to wrestle price increases back under control for slightly more than a year, raising interest rates to nearly 5 percent from near zero as recently as March 2022 to slow the economy and weigh down costs.

"Officials are now assessing how their policy changes are working, and they are trying to gauge whether they need to do more to ensure that price increases will come fully under control. Inflation has been decelerating after peaking at about 9 percent last summer, but the process has been slow. It remains a long way back to the 2 percent inflation that was normal before the onset of the pandemic in 2020."

And from the Washington Post:

"Reading the inflation report, economists emphasized the need to stay cautious and not treat all sources of price hikes as equal. For example, inflation reached a peak of 9.1 percent in large part because Russia’s invasion of Ukraine temporarily upended global oil markets. Falling energy prices since then have helped bring overall inflation down. But meanwhile 'core inflation,' a closely watched measure that strips out more-volatile categories such as food and energy, rose 5.6 percent over the previous year in March — after months of declines.

"'To use my car analogy, we’ve managed to get through really difficult conditions — slowing the car, getting around the wrecks — but that means we’re only part of the way to our destination,' said Betsey Stevenson, an economist at the University of Michigan and a member of the Council of Economic Advisers in the Obama administration. 'If we were to hang a banner up right now that says ‘Mission accomplished,’ I feel pretty confident we would wreck the car'."

KC's View:

Love the "don't wreck the car" analogy.

Reminds me of the underlying message from Charlie Wilson's War:  "Don't f*** up the end game."  In other words, don't engage in premature self-congratulations.  There seem to be a lot of good arguments that the Fed was too slow to deal with inflation, and therefore it shouldn't make the mistake of backing off to quickly, which would compound its errors for reasons of political expediency.