US CPI higher than expected

US CPI higher than expected

Based on a statement made by the US Labor Department, the consumer price index (CPI) increased more sharply than expected in March. US CPI rose 0.6% in March 2005. Excluding food and energy prices, the core CPI saw an increase of 0.4%. Wall Street economists had been expecting a rise of 0.5% for overall CPI and a rise of 0.2% for core CPI. The news translated into strong gains for the US Dollar against the Euro and the Yen. Moreover, the CPI data raised expectations that the US Federal Reserve would further increase interest rates in an effort to counter inflationary pressures.