Inflation in the US fell to 5% on an annual basis in March, at its lowest level in two years, although it still remains far from the target set by the Federal Reserve (Fed). In February, inflation, based on the Consumer Price Index, stood at 6%, and analysts had expected it to ease to 5.2% in March.

According to the data released today by the Ministry of Labor, prices fell to their lowest level since May 2021. This “reinforcement” of inflation is mainly due to the decrease in energy prices (-3.5% for month of March and -6.4% on an annual basis).

The so-called structural inflation, excluding the energy and food sectors, also eased slightly to +0.4% from +0.5% in February. On an annual basis, however, it remains high, at 5.6%, from 5.5% the previous month.

That level remains far from the 2% target sought by the Fed, which has raised interest rates nine times in a year.

In March, rents and property prices rose by 0.6%, as did transport (+1.4%).

“There are encouraging signs (…) but with structural inflation still high, the Fed is likely to continue raising interest rates by 25 basis points at its next monetary committee meeting” on May 2 and 3, commented Paul Ashworth , an economist at Capital Economics.