Inflation rises to new 40-year high in key gauge watched by Fed

Inflation rose to a 6.6% annual rate in March in the personal consumption expenditures price index, the metric favored by the Federal Reserve, the Bureau of Economic Analysis reported Friday.

That is 0.3 percentage points higher than in the previous month and the fastest pace of inflation since January 1982.

The report is evidence that inflation is still accelerating, unwelcome news both for families stretched to afford basics and for President Joe Biden, whose popularity has been greatly damaged by the rising prices.

Friday’s report will not lessen the urgency within the Fed to tighten monetary policy in an attempt to regain control of inflation. Already, the Fed was expected to take the historically aggressive step next week of raising its target rate by half a percentage point in an effort to slow spending and lower price pressure.