Our investment and economic outlook, April 2024

Monthly outlook April 18, 2024U.S. Consumer Price Index (CPI) data for March underscore the challenge faced by Federal Reserve policymakers as they try to guide inflation down toward their 2% target. Getting there would require a slower pace of growth for two especially sticky CPI components—shelter and services excluding shelter. Without progress on those fronts, the Fed may not be able to cut its benchmark interest rate target. The "last mile" of inflation reduction will require progress on shelter and services Note: The chart shows year-over-year rates of change in the core U.S. Consumer Price Index, which excludes food and energy prices, starting in January 2020 and ending in March 2024. It also breaks those rates of change into three sources. Last month, according to the core CPI, shelter prices were 5.7% higher than they had been one year earlier. Shelter accounted for more than two-thirds of the 3.8% rise in total core CPI.Sources: Vanguard calculations using data from Refinitiv...