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close video The Fed risks ‘overshooting’ its inflation, rate hike goals: Diane Swonk

KPMG Chief Economist Diane Swonk says it’s important to remember rapid rate hikes can exacerbate market fragility.

A high-stakes inflation report due Wednesday is expected to show that price pressures within the economy remained strong last month despite an aggressive interest rate hike campaign by the Federal Reserve.

Economists expect the consumer price index, which measures a basket of goods, including gasoline, health care, groceries and rent, to show that monthly prices rose 0.2% in March, down slightly from an increase of 0.4% February. On an annual basis, inflation is projected to have climbed 5.1% at an annual rate, a decline from 6% the previous month and a peak of 9.1% in June. 

While that would mark the slowest pace of inflation since May 2021, it remains nearly three times higher than the Fed's 2% target. 

Other parts of the report are also expected to point to a slow retreat for inflation, a worrisome sign for the U.S. central bank. Core prices, which exclude the more volatile measurements of food and energy, are expected to climb 0.4% or 5.6% annually, suggesting that underlying price pressures remain strong. 

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"Core inflation, and core services, should remain sticky-high," Bank of America analysts wrote in a note Monday,

The report is the last before the Federal Reserve's next policy-setting meeting May 2-3 and will have major implications for the U.S. central bank, which is tightening monetary policy at the fastest rate in decades as it tries to crush out-of-control inflation. 

Officials have already approved nine straight rate increases, lifting the federal funds rate to a range of 4.75% to 5%, the highest since before the 2008 financial crisis. 

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Markets expect policymakers to approve another quarter-percentage point hike at the conclusion of their meeting next month despite upheaval in the banking system and concerns over a slowing economy. 

A man shops for meat at a Safeway grocery store in Annapolis, Md., May 16, 2022. (Jim Watson/AFP via Getty Images / Getty Images)

The probability that the Fed continues its rate hike campaign in May rose to 71% Wednesday, according to data from the CME Group's FedWatch tool, up from 44.8% just one week ago. About 28% of traders, meanwhile, are expecting central bankers to pause the rate hikes. 

"The Fed's policy should continue to have the desired impact on price pressures," said Michael Weisz, president of the investment firm Yieldstreet. "However, the target rate of 2% continues to be a long way off from the current path. The 'higher for longer' thesis may include both interest rates, as well as overall price levels, and thus slowing inflation may not happen as quickly as desired."

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Shoppers in a Kroger supermarket Oct. 14, 2022, in Atlanta. (Elijah Nouvelage/AFP via Getty Images / Getty Images)

The Fed is also watching other economic indicators, including job growth and consumer inflation expectations. In another welcoming sign for the central bank, there were indications the labor market softened but did not deteriorate last week. 

The March jobs report showed employers added 236,000 jobs last month, the smallest gain since December 2020, and that monthly wages also cooled. 

"Employment growth has not yet collapsed, though there are visible signs of continued moderation," said Kathy Bostjancic, Nationwide chief economist. "In all, the Federal Reserve will be pleased by the details of the employment report, but still is supportive of another rate hike in May, which we think could be the last for the tightening cycle, followed by a long pause."

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Jays’ Springer leads off with 21st postseason HR

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Jays' Springer leads off with 21st postseason HR

TORONTO — The Blue JaysGeorge Springer homered on the first pitch from Seattle‘s Bryce Miller in the American League Championship Series opener Sunday, moving past the New York Yankees‘ Derek Jeter into sole possession of fifth place on the career list with his 21st postseason home run.

Springer’s 385-foot drive to right field on a fastball at the outside corner put Toronto ahead with the first postseason leadoff home run in Blue Jays history. Springer has 63 leadoff homers in the regular season, second to Rickey Henderson’s record 81.

Manny Ramirez hit a record 29 postseason homers and is trailed by Jose Altuve (27), Kyle Schwarber (23) and Bernie Williams (22).

However, also in the first inning, Blue Jays outfielder Nathan Lukes fouled a ball off his right knee, falling in pain. He stayed in the game and drew a 12-pitch walk, then flied out leading off the third and was replaced by Myles Straw for the start of the fourth.

The team said he bruised his knee and was being further evaluated.

Lukes went 4-for-12 with five RBIs in Toronto’s division series win over the Yankees, including a key two-run single in the Game 4 clincher. He also made a diving catch in Toronto’s Game 1 win.

The Associated Press contributed to this report.

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L.A. to start Snell in Game 1, Ohtani later in NLCS

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L.A. to start Snell in Game 1, Ohtani later in NLCS

MILWAUKEE — The Los Angeles Dodgers will start lefty Blake Snell in Game 1 of the NLCS against the Milwaukee Brewers on Monday night while righty Yoshinobu Yamamoto will get the ball in Game 2. It means Shohei Ohtani will get just one start in the series, during the middle leg back in Los Angeles.

“He’ll pitch at some point, but we just don’t know which day,” Dodgers manager Dave Roberts said on Sunday.

Unlike in previous spots, the Dodgers are not concerned with pitching Ohtani before a day off, choosing to maximize rest for the other starters as the team embarks on its first best-of-seven series this postseason.

“Not as important,” Roberts said. “I think just appreciating having four starters in a potential seven-game series and who can pitch potentially twice, and that’s kind of the impetus, versus Shohei having that day off after a game.”

Ohtani is hitting just .148 this month with a 4.50 ERA over six postseason innings. Roberts was asked if the pitching plan for him was related to his slump at the plate.

“No, not at all,” Roberts answered. “I think it was just kind of Shohei’s going to pitch one game this series. So, it’s one game and then you have two other guys that potentially can pitch on regular rest.”

The Brewers are likely to counter with an opener in Game 1 before handing the ball to a starter for “bulk” innings.

“Game 1 looks, ‘OK, who on our team that can give us length,'” Brewers manager Pat Murphy said. “[Jose] Quintana, [Quinn] Priester, something like that — give us bulk.”

Murphy indicated righty Freddy Peralta would start Game 2 and then they’ll figure out Game 3 after that. He wasn’t sure yet if rookie Jacob Misiorowski would start a game or pitch multiple innings out of the bullpen.

“I don’t know,” Murphy stated. “I really don’t know. That hasn’t been concrete yet. There’s a possibility he’d start.”

Rosters don’t have to be turned in until Monday morning, but the Dodgers are considering carrying just two catchers as Will Smith‘s hand injury isn’t a big concern. He caught the entirety of Games 3 and 4 in the NLDS.

“I have a couple of conversations to have shortly,” Roberts said. “But yeah, that’s a good thought.”

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Jays name Yesavage starter for Game 2 of ALCS

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Jays name Yesavage starter for Game 2 of ALCS

TORONTO — Blue Jays rookie Trey Yesavage will start Game 2 of the American League Championship Series on Monday, the team announced Sunday.

With the announcement, Yesagave addressed the media before Game 1 at Rogers Centre and began his news conference with an unprompted statement decrying the vitriol his loved ones have recently received on social media.

“I want to start off by saying something,” Yesavage said. “Living in this world where there’s so many different opinions and feelings, which results in a lot of hate, it’s sad to see that people close to me are being attacked for my performances on the field. These people have done nothing to warrant negativity for my actions, whether that’s my parents, my brothers, my girlfriend, family. It’s just really sad.”

Yesavage declined to elaborate on the situation. It’s the second time that a rookie starting pitcher has denounced social media attacks this postseason; Yankees right-hander Cam Schlittler said Red Sox fans “crossed the line” by attacking his family before his start against Boston in Game 3 of the wild-card series.

“I know I have the platform to address it, so I am,” Yesavage said. “I hope that people can realize that those individuals have nothing to do with what happens on the field or whatnot. If you have a problem, I’m a man; I can take whatever opinions anybody has about me or my life. So, I just wanted to get that out there.”

Game 2 will be Yesavage’s fifth career major league outing. His fourth was a historic performance against the Yankees in Game 2 of the AL Division Series, when he tossed 5⅓ no-hit innings with 11 strikeouts.

Mariners manager Dan Wilson said his team has not decided on a Game 2 starter, though Logan Gilbert is the likely choice. Seattle used Gilbert and fellow starter Luis Castillo in their 15-inning Game 5 win over the Tigers on Friday night. Gilbert threw 34 pitches over two innings after allowing a run in six innings in Game 3 on Tuesday.

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