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Easing US inflation stokes interest rates cut debate

The pace of price increases in the US showed signs of slowing last month, after a streak of higher-than-expected inflation data stoked concerns about the world's largest economy.
 
Consumer prices rose 3.4 per cent in the 12 months to April, down from 3.5 per cent for the month before.
 
Higher rents and petrol costs accounted for the majority of the increase in the cost of living.
 
The US Labor Department says in April, the cost of goods and services rose an average 0.3 per cent, down slightly from 0.4 per cent the previous month.
 
Producers faced a 0.5 per cent average increase in their costs.
 
Analysts said the fall in inflation was unlikely to resolve debates about how the US central bank should set interest rates.
 
The Federal Reserve has kept its key interest rate hovering around 5.3 per cent since last July, hoping that the highest borrowing costs in two decades will help ease pressures pushing up prices.


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