Money and Metals

The Labor Department has this report on inflation. "Clothing and shelter costs in March spurred the biggest rise in core U.S. inflation in a year, the government said on Wednesday in a report that cast doubt on a quick end to Federal Reserve interest-rate rises. Energy prices helped push the overall consumer price index up a steep 0.4 percent. Excluding food and energy prices, the index advanced 0.3 percent, a bit more than forecast."

"'This is not good news,' said (economist) Robert MacIntosh. 'That should take the punch bowl away for today.' Prices for U.S. government bonds fell, the dollar rose and stock futures pared gains as traders increased bets that two more rate hikes may lie ahead, rather than just one."

"Despite the gain in core prices, the 12-month rate of advance remained at a relatively benign 2.1 percent. The 12-month gain in overall consumer prices slowed to 3.4 percent from the 3.6 percent rise registered through February. Energy costs shot up 1.3 percent last month, reversing a 1.2 percent February drop. Gasoline prices increased 3.6 percent, while natural gas costs fell 4.3 percent."

"The rise in consumer prices ate into Americans' spending power, with inflation-adjusted earnings falling 0.3 percent in March. Over the past year, real earnings have risen a scant 0.1 percent."

"Fed officials are counting on a slowing U.S. housing market to keep the economy from overheating, and there have been numerous signs a long housing boom is simmering down. The latest indication was a report from the Mortgage Bankers Association on Wednesday that showed mortgage applications fell last week for a second consecutive time as mortgage rates reached new multiyear highs."