US April CPI rose more than expected to 3.8%, with Federal Reserve officials calling service sector inflation "disappointing."
2026-05-13 09:47:29
On May 12 local time, data released by the U.S. Bureau of Labor Statistics showed that the U.S. CPI rose 3.8% year-on-year in April, exceeding the market expectation of 3.7% and reaching a new high since May 2023; the core CPI, excluding food and energy, rose 2.8% year-on-year, exceeding the expectation of 2.7% and reaching a new high since September 2025.
Chicago Federal Reserve Bank President John Goolsby stated that the data showing accelerated consumer inflation in the US in April was disappointing, indicating that inflation is heading in the wrong direction. He specifically pointed out that price pressures in the service sector are currently the most worrying area, and that this problem is not caused by oil prices or tariffs.
“Inflation is heading in the wrong direction, and not just in terms of factors related to oil prices or tariffs,” Goolsby noted at an event in Rockford, Illinois. He said that while the overall data met expectations, the performance of the service sector was “surprising and disappointing.”
He further emphasized: "This is exactly what I'm worried about. I hope to see service sector inflation at least stop rising and eventually start to fall, because it's unlikely to be caused by oil prices."
At its April meeting, the Federal Reserve decided to keep short-term lending rates unchanged at 3.50%-3.75%. Goolsby voted against the decision, citing his disagreement with the statement's biased wording regarding future rate cuts.
Goolsby stated, "We need to recognize that the job market is fundamentally stable, while inflation is rising. We are not currently in a difficult trade-off between the Fed's dual mandate. One mandate is deteriorating, while the other is not improving. Therefore, we must remain vigilant in the short term."
Goolsby spoke highly of outgoing Federal Reserve Chairman Jerome Powell, calling him "an undisputed first-rate Fed chairman," noting his success in averting a financial crisis amid the COVID-19 pandemic and the collapse of several large banks. He specifically mentioned, "In 2023, we achieved a significant drop in inflation without a recession, which is almost unprecedented, especially given the questioning of the Fed's independence."
It is worth noting that former US President Trump attempted to remove a current Federal Reserve governor from office, a case currently being heard by the Supreme Court; he also supported a criminal investigation into Powell, but a federal judge has ruled that the investigation was merely a pretext to force Powell to cut interest rates or resign. Warsh, who will succeed Powell, was confirmed to the Federal Reserve Board of Governors on Tuesday and is expected to be formally confirmed as Fed Chairman as early as Wednesday.
Goolsby expressed serious concern about the current inflation trend, particularly the continued rise in the service sector. He believes that current monetary policy should remain highly vigilant about inflation, rather than prematurely leaning towards interest rate cuts. Meanwhile, the ongoing leadership changes at the Federal Reserve and the political maneuvering surrounding its independence continue, adding further uncertainty to future policy directions.
As of press time, the US dollar index was trading around 98.30, up slightly by about 0.06% on the day, with a fluctuation range of only 0.08%, indicating that the market has entered a brief period of narrow consolidation after the release of key data and policy signals.
Nick Rees of Monex Europe said in a report that the dollar reacted mutedly to higher-than-expected U.S. inflation data on Tuesday, as the data is unlikely to change the Federal Reserve's policy narrative. U.S. year-on-year inflation rose to 3.8% in April, primarily driven by higher energy prices. "Given recent geopolitical developments, this result is not surprising, and in the absence of evidence of broadening price pressures, voting members of the Federal Open Market Committee are likely to ignore the data." The rise in inflation also reflects the impact of several other one-off factors.
(US Dollar Index Daily Chart, Source: FX678)
At 9:40 AM Beijing time on May 13, the US dollar index was at 98.30.
Chicago Federal Reserve Bank President John Goolsby stated that the data showing accelerated consumer inflation in the US in April was disappointing, indicating that inflation is heading in the wrong direction. He specifically pointed out that price pressures in the service sector are currently the most worrying area, and that this problem is not caused by oil prices or tariffs.
Goolsby: The service industry is the key to the "unexpected and disappointing" situation.
“Inflation is heading in the wrong direction, and not just in terms of factors related to oil prices or tariffs,” Goolsby noted at an event in Rockford, Illinois. He said that while the overall data met expectations, the performance of the service sector was “surprising and disappointing.”
He further emphasized: "This is exactly what I'm worried about. I hope to see service sector inflation at least stop rising and eventually start to fall, because it's unlikely to be caused by oil prices."
Goolsby opposed keeping interest rates unchanged.
At its April meeting, the Federal Reserve decided to keep short-term lending rates unchanged at 3.50%-3.75%. Goolsby voted against the decision, citing his disagreement with the statement's biased wording regarding future rate cuts.
Goolsby stated, "We need to recognize that the job market is fundamentally stable, while inflation is rising. We are not currently in a difficult trade-off between the Fed's dual mandate. One mandate is deteriorating, while the other is not improving. Therefore, we must remain vigilant in the short term."
Goolsby praises Powell; political maneuvering continues.
Goolsby spoke highly of outgoing Federal Reserve Chairman Jerome Powell, calling him "an undisputed first-rate Fed chairman," noting his success in averting a financial crisis amid the COVID-19 pandemic and the collapse of several large banks. He specifically mentioned, "In 2023, we achieved a significant drop in inflation without a recession, which is almost unprecedented, especially given the questioning of the Fed's independence."
It is worth noting that former US President Trump attempted to remove a current Federal Reserve governor from office, a case currently being heard by the Supreme Court; he also supported a criminal investigation into Powell, but a federal judge has ruled that the investigation was merely a pretext to force Powell to cut interest rates or resign. Warsh, who will succeed Powell, was confirmed to the Federal Reserve Board of Governors on Tuesday and is expected to be formally confirmed as Fed Chairman as early as Wednesday.
Being vigilant against inflation remains a top priority, and the policy outlook faces multiple uncertainties.
Goolsby expressed serious concern about the current inflation trend, particularly the continued rise in the service sector. He believes that current monetary policy should remain highly vigilant about inflation, rather than prematurely leaning towards interest rate cuts. Meanwhile, the ongoing leadership changes at the Federal Reserve and the political maneuvering surrounding its independence continue, adding further uncertainty to future policy directions.
As of press time, the US dollar index was trading around 98.30, up slightly by about 0.06% on the day, with a fluctuation range of only 0.08%, indicating that the market has entered a brief period of narrow consolidation after the release of key data and policy signals.
Nick Rees of Monex Europe said in a report that the dollar reacted mutedly to higher-than-expected U.S. inflation data on Tuesday, as the data is unlikely to change the Federal Reserve's policy narrative. U.S. year-on-year inflation rose to 3.8% in April, primarily driven by higher energy prices. "Given recent geopolitical developments, this result is not surprising, and in the absence of evidence of broadening price pressures, voting members of the Federal Open Market Committee are likely to ignore the data." The rise in inflation also reflects the impact of several other one-off factors.
(US Dollar Index Daily Chart, Source: FX678)
At 9:40 AM Beijing time on May 13, the US dollar index was at 98.30.
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