Inflation ticked up slightly in March, with the consumer price index (CPI) up 3.5 percent from a year ago.  

“Core” inflation, which excludes volatile food and energy prices, also rose for the first time in a year to 3.79 percent from 3.76 percent in February. 

Inflation has fallen steeply from its 9 percent peak in June 2022. But the path to the Federal Reserve’s 2 percent annual inflation target has proven elusive as the CPI has bounced between 3 and 4 percent for nearly a year. 

Following the new CPI reading Wednesday morning, the CME FedWatch put the odds of a June rate cut at just 21 percent. The forecasting algorithm doesn’t foresee higher odds for a cut than a pause until September. 

“The lack of downward momentum in core inflation will be met with some discomfort within the [Fed], especially as some Fed officials are growing increasingly uneasy about cutting rates amid inflation stickiness,” wrote EY senior economist Lydia Boussour and chief economist Gregory Daco in a Wednesday analysis. 

“Still, many will wait to observe the read on their favored inflation gauge — PCE inflation — later this month before adjusting their views,” they wrote, referring to the Commerce Department’s personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation. 

The Hill’s Tobias Burns has more here.