In March, the Federal Reserve's inflation rate reaches its lowest level, but hedge funds remain stable

In March, the Federal Reserve's inflation rate reaches its lowest level, but hedge funds remain stab ...

Updated at 9:10 AM EST

The Federal Reserve''s preferred measure of inflation in the United States improved from three-decade highs last month, according to statistics on Friday, although it is unlikely to slow down the central bank''s rate hike course ahead of next week''s policy meeting in Washington.

The March core PCE Price Index rose 5.1 percent from last year, down from the highest levels since 1983, and 0.3 percent on the month, according to the Bureau of Economic Analysis, a figure that was mainly in line with Wall Street expectations and might indicate early signs of easing consumer pricing fluctuations. The increase in February was reduced, to 0.3% from 0.4 percent.

The Bureau of Labor Statistics said earlier this month that headline inflation accelerated to the highest rate in four decades in March, but data showed that so-called core inflation, which excludes volatile components such as food and energy prices, only increased 0.4 percent in the month, with the annual reading of 6.5% coming in just shy of the Street consensus prediction.

The headline PCE index was up 0.9 percent on the month and 6.7 percent on the year, the highest levels since 1980. Personal income increased by the faster-than-expected pace of 0.5%, while personal expenditure increased 1.1 percent, according to the BEA, ahead of the Street consensus forecast.

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"These statistics have no immediate policy implications, because the Federal Reserve has long been set on a 50 basis point hike in May, but at the margin it makes a second 50 basis point increase in June more likely." The effects of the housing market''s meltdown, which is now in its early stages, and the expected rapid decline in inflation have slowed.

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The FedWatch tool from the CME Group is showing a 98.7% chance of a 50 basis point rate hike in March, as well as a similar chance of a 75 basis points follow-on move in June.

Following the data publication, Wall Street futures were little-changed, with indices of a 165-point opening bell decline, as well as those linked to the S&P 500, which is down 5.4 percent for the month, and priced for a 44-point decline.

Benchmark 10-year Treasury bond rates in the United States increased to 2.885% while the US dollar index, which monitors the greenback against a range of six global currencies, fell from a near two-decade high to 103.199.

The Atlanta Federal Reserve''s GDPNow forecasting tool, a real-time benchmark, suggests economic growth in the United States is growing at a 0.4% rate, and the Commerce Department''s first estimates of first quarter growth showed a drop of 1.4 percent, the first in two years.

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