Although American consumer inflation slowed down last month, prices are still rising. The decrease is primarily attributable to cheaper food and gas, which relieved the strain on struggling households who had to contend with steadily rising prices. The Federal Reserve will continue to raise interest rates, beginning next month with at least one more hike.

According to government data released on Wednesday, consumer prices increased by 0.1% in March compared to the same month a year earlier, less than the 0.4% increase that occurred between January and February. Prices increased by 5% in March when compared to a year earlier, which is less than the 6% increase seen in February. The decline in prices of goods like gas, furniture, and secondhand automobiles, which rose sharply last year after Russia’s invasion of Ukraine, can be blamed for the decrease in the rate.

However, the research shows that there is serious concern about the core inflation rate. When volatile products like food and energy are not considered in the research, core inflation is still significant, growing by 5.6% from the previous year and 0.4% from February to March. The Federal Reserve and the majority of private economists concur that core prices are a superior indicator of underlying inflation. Rents, restaurant meals, and auto insurance are just a few of the prices that have skyrocketed in the last month in the country’s services sector, which is why inflation is still high.

With rental costs increasing at the slowest rate in a year and grocery prices declining for the first time in 2.5 years, the March data does show some indications that inflation is gradually declining. Although food costs dropped last month, they still increased by over 8% over the previous year, and restaurant prices increased by about 9%.

According to the inflation trend, the Federal Reserve will probably raise its benchmark interest rate for a record-breaking tenth time in a row when it meets in May. Core inflation is being kept high by the cost of services, and this tendency is anticipated to continue for some time.

Despite efforts by central banks, including the Federal Reserve, to reduce it, the IMF, a 190-nation lending agency, cautioned on Tuesday that high international inflation will have a negative impact on global GDP this year and the following year. According to the analysis, the market’s cooling down and the inflation rate’s persistent rise will probably have detrimental consequences on the economy in the future.