## US Inflation Report Raises Concerns, Rate Cut Unlikely Soon
The recent US inflation figures have sparked concerns about global economic turbulence and dashed hopes for an immediate rate cut by the Federal Reserve. Uday Kotak, founder of Kotak Mahindra Bank, believes that a rate cut is unlikely until closer to the US Presidential elections, citing higher inflation and rising oil prices.
The Consumer Price Index (CPI), which measures the cost of goods and services, rose 0.4% in March, pushing the annual inflation rate to 3.5%. This unexpected surge has dampened expectations for a June interest rate reduction by the Fed.
Kotak warned that higher inflation and oil prices will keep interest rates elevated globally, including in India. He also highlighted the potential for economic implosion in China as a wildcard factor that could further disrupt the global economy.
The release of the inflation data triggered a slump in US stocks, with the Dow Jones Industrial Average falling by over 500 points. Financial experts believe that a June rate cut is unlikely, and the Fed may even consider an increase if inflation continues to rise.
Several Fed officials have expressed skepticism about lowering rates in the near future. Atlanta Fed President Raphael Bostic expects only one cut this year, likely in the fourth quarter, while Governor Michelle Bowman has suggested a potential rate increase if economic data warrants it.