rose moderately in February, and while inflation cooled, it remained elevated enough to possibly allow the Federal Reserve to raise interest rates one more time this year.
However, Boston Federal Reserve President Susan Collins said the inflation data doesn’t alter the Fed’s monetary policy path yet, while New York Fed President John Williams said financial conditions will be a key contributor to his thinking about what’s next for central bank interest rate policy. On Wall Street, US stocks rose, with the S&P 500 set to notch its second straight quarterly advance as it closed at its highest level since February 15, after advancing for three straight weeks to close out the month.
European shares were also higher, after a reading of inflation in the eurozone dropped by the most on record in March, although the core price growth, which excludes food and energy, accelerated. Expectations the Fed may be nearing the end of its rate hiking cycle have helped send US Treasury yields lower recently. The 2-year US Treasury yield, which typically moves in step with interest rate expectations, was down 4.7 basis points at 4.052% on the day, after touching a low of 4.023%.