The latest inflation report confirms that we're heading in the wrong direction.

From Marketplace, I'm Novosafo. Good morning. The Federal Reserve's preferred reading on inflation,

the Personal Consumption Expenditures Price Index for the month of April. It came out this morning.

Prices are up 3.8% from a year ago. In March, it was 3.5%. So inflation is heating up.

Core prices, which show underlying inflationary pressures, rose 3.3%. For more on today's numbers,

we're joined by Diane Swank, chief economist at the Audit Tax and Advisory firm, KPMG.

Diane, good morning.

Good morning.

So what's stuck out to you in today's report?

Well, the biggest issue for the Federal Reserve right now is not only that we're seeing the

additional energy price inflation, which is eating away at consumer budgets, but we're

also seeing very sticky core services inflation. That's the underlying

inflation, which really increased before the war in Iran, and it is running more than a full

percentage point ahead of 2019 levels and anything that is consistent with what the Fed considers

price stability, which is their 2% target.

That's a lot of jargon.

The important point is this is one of the reasons that the Federal Reserve has seen a major

shift and how people within the Fed are viewing their next move on rates.

It's more likely to be up now instead of down.

Yeah. And in fact, over the last 24 hours or so, we had Fed Chair Philip Jefferson,

Governor Lisa Cook, Chicago Fed President Austin Gouldsby, all saying they're more worried right

now about inflation than the job market.

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