The consumer price index, which measures the costs of goods and services, increased year over year in March by 3.5%, which was slightly higher than economists' prediction of a 3.4% increase.
Month-over-month, the CPI was up by 0.4%.
The increase was driven by a 1.1% rise in energy costs and a 0.4% increase in shelter costs from February. Year-over-year shelter costs have increased by 5.7%.
The latest report from the Labor Department's Bureau of Labor Statistics has investors concerned that the Federal Reserve may wait to begin cutting interest rates. Officials have kept the rates high as they try to bring down inflation levels to 2%. But, with inflation numbers remaining high, there is concern they may delay the rate cuts even further.
"This marks the third consecutive strong reading and means that the stalled disinflationary narrative can no longer be called a blip," Seema Shah, chief global strategist at Principal Asset Management, said, according to CNBC. "In fact, even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the US election will begin to intrude with Fed decision making."
The stock market reacted negatively to the news, with the Dow, Nasdaq, and S&P 500 all posting significant losses in mid-day trading.