Inflation moves closer to Fed target

The Fed's preferred inflation measure nears its 2% target

Excluding volatile food and energy costs, prices rose 0.2% in March, in line with economists' expectations.

Consumer prices as measured by the personal consumption expenditures (PCE) price index jumped 2.0 percent year-on-year last month. The US dollar rose to 0.9907 Swiss franc from 0.9879 Swiss franc, and it increased to 1.2841 Canadian dollars from 1.2834 Canadian dollars.

The federal open market committee, the Fed's policymaking...

USA consumer spending picked up in March while the Federal Reserve's preferred inflation gauge hit the central bank's 2% target for the first time in a year, reinforcing the outlook for further interest-rate hikes. The 2-year Treasury yield held at 2.49%, up 1 basis point. They are expected to keep rates unchanged after raising them in March.

A hardening in expectations for Fed rate rises contrasts with signs that other central banks are taking a lower gear on the road away from easy monetary policy.

"I'm actually very comfortable going above 2 percent by some amount, 2.2 percent, 2.3 percent", Atlanta Fed President Raphael Bostic told Bloomberg Television on April 5.

Sterling had soared to a 22-month high near $1.4377 just two weeks ago on speculation that the Bank of England would hike interest rates soon.

With the Fed looking likely to hike US interest rates much more than other major central bank rivals, the US Dollar has benefitted from perceived monetary policy divergence. USA stock index futures were trading higher.

More news: EXACTLY What will Happen In Nashville vs Winnipeg

Overseas, investors will be watching North Korea, after the nation's leader met with the leader of South Korea on Friday.

The figure almost matched the Fed's 2 per cent target.

Personal incomes rose 0.3 percent in March, while wages and salaries advanced 0.2 percent - the smallest gain since October.

The data in the April 30 report were largely telegraphed in last week's figures on first-quarter gross domestic product, which showed consumers pulled back on their spending after a robust end to 2017.

Analysts are expecting strong US growth throughout 2018, spurred by increasing federal spending and a rush of economic activity spurred by the 2017 tax cuts.

The euro was almost flat at $1.2075 after slipping 0.4 percent overnight and approaching $1.2055, the 3-1/2-month low set on Friday.

Market reaction: Investors were prepared for higher consumer spending in March and the PCE index reaching 2% after first-quarter GDP (http://www.marketwatch.com/story/first-quarter-gdp-slows-to-23-but-that-isnt-so-bad-2018-04-27) was released on Friday. The so-called real consumer spending fell 0.2 percent in February.

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