Atlanta Fed Sees Flexible Prices Jump 19.3% in April as Sticky Inflation Accelerates to 4.6%
Updated
Updated · Real Economy Blog · May 19
Atlanta Fed Sees Flexible Prices Jump 19.3% in April as Sticky Inflation Accelerates to 4.6%
2 articles · Updated · Real Economy Blog · May 19
Flexible consumer prices rose at a 19.3% three-month annualized rate in April, while the Atlanta Fed’s sticky-price CPI climbed 4.6% annualized after 2.4% in March.
Service-sector inflation helped drive the increase, rising 0.6% in April and 3.4% from a year earlier as demand stayed robust across rents, transportation, health care, education and subscription services.
The report also tied the latest flexible-price spike to supply disruptions linked to the Iran war, echoing earlier jumps during the Ukraine war and past oil-related shocks.
With sticky prices slow to respond to monetary policy, the data complicate Kevin Warsh’s rate-cut mandate and raise the risk the Fed delays easing or even returns to tightening.
Both measures remain well above the Fed’s 2% target, reinforcing higher inflation expectations, pressure on bond yields and weaker real income growth for households.
The new Fed Chair was expected to cut rates. Will he now risk a recession to tame inflation driven by global supply shocks?
With war and tariffs fueling inflation, can the Fed's interest rate hikes solve a problem they did not create?
US Inflation Hits 3.8% in April 2026: Energy Shocks, Wage Pressures, and Fed Response
Overview
In April 2026, consumer prices saw a significant jump, with the flexible cut of the Consumer Price Index (CPI) showing especially strong upward pressure. This flexible CPI, which tracks items that change price frequently, recorded a substantial annualized increase of 17.6 percent and a 5.6 percent rise year-over-year. The surge was driven by rapid price adjustments in certain sectors, particularly due to a sharp increase in gasoline prices following the U.S. launch of its war with Iran. These immediate market responses highlight how geopolitical events can quickly impact inflation and everyday costs for consumers.