US inflation experienced a modest increase in March; however, the persistently peaked costs for housing and utilities implied that Fed will likely maintain high interest rate for longer.

The robust consumer spending for the previous month reported by the Commerce Department on Friday, provided some comfort to financial markets who were broadly worried by stagflation following figures on Thursday that demonstrated that inflation soared and there was a slowdown in economic growth for Q1.

According to the Bureau of Economic Analysis, the PCE price index ticked up by 0.3% for the earlier month, mirroring Feb’s unrevised gain. Good prices saw a climb of 0.1% as the rise in gasoline and clothing costs were somehow countered by a drop in motor vehicle prices.

On the other hand, service prices edged up by 0.4%, accelerating from Feb’s 0.3% climb. They were buoyed by 0.5% rise in housing and utilities costs, encompassing rents. Rents have remained stagnant despite the surge in apartments supply and some data indicated a drop in rent demands.

In 1 year till March, inflation climbed by 2.7%, following a rise of 2.5% seen previously in February. The uptick in inflation for the earlier month was in consistent on a broad scale with the projections of economists.

There were mounting worries that inflation will spike beyond March’s predictions after the reveal of the GDP figures for Q1 on Thursday, which manifested the highest level of price pressure in a year.