US inflation rises to 3.2%, dampens hope of Fed’s interest-rate cut until June.

US inflation rises to 3.2%, dampens hope of Fed’s interest-rate cut until June.

A second straight month of stronger-than-expected inflation has effectively shut the door on the possibility of a Federal Reserve interest-rate cut before June, and makes back-to-back reductions after that look increasingly less likely.

Gasoline and shelter prices drove the February consumer price index up 3.2% versus a year earlier, an acceleration from January’s 3.1% increase.

Underlying core inflation, excluding gas and food prices, slowed less than economists had forecast, and on a three-month and six-month basis actually gained traction.

Those continued price pressures will not change the policy rate in the 5.25%-5.5% range where it has been since last July.

Tuesday’s inflation report “is an ugly read that will do nothing to sooth nerves” at the Fed, wrote BMO economist Scott Anderson. “Clearly, restrictive monetary policy has not yet fully done its work and a patient and slightly hawkish Fed must remain in place for the monetary medicine to fully take effect.”