11:12 AM EDT, 05/15/2024 (MT Newswires) -- US consumer inflation rose at a softer-than-forecast sequential pace in April but that didn't materially change market expectations for the Federal Reserve to stay on pause through the first half of the year.

The consumer price index advanced 0.3% sequentially last month, the Bureau of Labor Statistics reported Wednesday. The pace decelerated from March's 0.4% growth rate, which was also Wall Street's consensus, according to a Bloomberg-compiled survey. Annually, inflation slowed to 3.4% from 3.5%, in line with analysts' expectations.

"The April consumer price index is a small step in the right direction but it doesn't warrant any change to our forecast for the first rate cut by the (Fed) to occur in September followed by another in December," Oxford Economics Chief US Economist Ryan Sweet said in a note.

The Federal Open Market Committee is widely expected to maintain interest rates at its June and July meetings, according to the CME FedWatch Tool.

Core inflation, which excludes the volatile food and energy components, rose 0.3% in April, decelerating from the prior month's 0.4% pace and matching the consensus. On an annual basis, core inflation came in at 3.6%, as expected.

Monthly food prices were flat in April after edging up 0.1% in March, while energy price growth remained unchanged at 1.1%. Annually, food prices grew 2.2% while energy reported a 2.6% rise.

Shelter costs rose 0.4% sequentially for the third month in a row. Together with gasoline, the two components contributed to more than 70% of the monthly increase for the all-times index, the BLS said. US equity markets were rising intraday Wednesday.

The Census Bureau reported Wednesday that retail sales were unchanged in April following a downwardly-revised 0.6% increase in March, versus expectations for a 0.4% increase.

"All told, the CPI and retail sales fit into the Fed's patient narrative, rather than adding fuel to the debate about the central bank resuming raising interest rates," Sweet said.