Finally, some good news on inflation.

The Consumer Price Index climbed 3.4 percent in April from a year earlier, down from 3.5 percent in March, the Labor Department said on Wednesday. The “core” index — which strips out volatile food and fuel prices in order to give a sense of the underlying trend — rose 3.6 percent last month, down from 3.8 percent a month earlier. It was the lowest annual increase in core inflation since early 2021.

The report followed three straight months of uncomfortably rapid price increases that rattled investors and worried policymakers at the Federal Reserve. Economists cautioned that one month of encouraging data was far from enough to put those worries to rest. But they said the data should ease concerns, at least for now, that inflation was re-accelerating.

“I would characterize it as a small step in the right direction,” said Stephen Stanley, the chief U.S. economist at Santander.

Both overall and core prices rose 0.3 percent from the previous month, down from 0.4 percent in February and March.

Inflation fell rapidly last year, giving rise to hopes that the Fed was on the verge of succeeding in its effort to rein in price increases without causing a recession, and that the central bank could soon begin to cut interest rates, which are currently set at about 5.3 percent. But progress stalled in the first three months of the year, and investors have all but given up hope of rate cuts before September.

The inflation report on Wednesday is unlikely to change those expectations on its own. But it could be a step toward giving policymakers confidence that inflation is returning to normal, which they have said they need before they begin to cut rates. And it is likely to further reduce the chances — already remote — that policymakers could decide to raise rates rather than cut them.

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