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Raising interest rates while inflation is going up is easy for the Federal Reserve to justify. Raising them when inflation is going down might be harder.
The Labor Department on Tuesday said consumer prices rose a seasonally adjusted 1.2% in March from a month earlier, putting them 8.5% above their year-earlier level for the fastest annual gain since December 1981. Core prices, which exclude food and energy items to better reflect inflation’s trend (as well as the life experiences of those who neither drive nor eat) were up 6.5% from a year earlier, for the biggest gain since August 1982.