U.S. inflation barely rose in March as consumer spending remained tepid, making it less likely that the Federal Reserve will be able to follow through on its projected two interest rate hikes this year.
The Federal Reserve left interest rates unchanged on Wednesday, but kept the door open to a hike in June while showing little sign it was in a hurry to tighten monetary policy amid an apparent slowdown in the U.S. economy.
Oil futures slid after setting a 2016 high on Thursday as traders locked in profits, though analysts said supply disruptions, strong investor appetite and a weakening dollar could push prices higher soon.
U.S. economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.
U.S. futures are pointing to a negative open on Thursday, tracking losses in Europe and Asia overnight, as investors weigh up the slightly hawkish Fed statement on Wednesday and look ahead to the advanced first quarter GDP data.
Crude oil prices surged again as U.S. oil production fell for the seventh week in a row and global central bankers seem a little more upbeat. With the Federal Reserve changing the wording and removing “risks" from their statement and Japan’s central bank holding fire, the demand expectations have changed dramatically from just a few months ago when many thought that global oil demand would grind to a halt.