US inflation eases to 3.4% in relief for Fed

First decrease in six months

US consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.

Federal Reserve policymakers who say they need to see further progress on inflation before reducing borrowing costs got some encouraging data. Those expectations were further bolstered by other data on Wednesday showing retail sales were unexpectedly flat last month as inflation-weary consumers cut back spending at online retailers and auto dealerships.