US price growth stokes rate fears
US consumer prices rose faster than expected during April, sparking speculation that US interest rates may have to rise further to cap inflation.
Consumer prices gained by 0.6% last month, the Labor Department said. Core inflation, which does not include food or energy costs, increased by 0.3%.
Rising prices are often a trigger for interest rates to go up.
Last week the US central bank, the Federal Reserve, raised interest rates by a quarter of percentage point to 5%.
'Hawkish position'
Many analysts had predicted this would be the last in the Fed's recent string of rises.
But the new figures indicate that the economy may be expanding more quickly than first thought, driving price growth.
At the same time, high energy costs are still exerting upward pressure.
Les Satlow of Cabot Money Management said that the new data was the latest indication that inflation - always a key concern for rate-setters - might become a problem.
"Clearly this is going to tilt the Federal Reserve a little bit more in favour of a hawkish position," he said.
US bonds fell on the news, indicating that investors expect borrowing costs to go higher.
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