US CPI: Headline inflation should have gotten a sizeable boost in March - CIBC

On Wednesday, March CPI data in the US is due. Analysts at CIBC estimate inflation increased 0.4% in March and 1.9% from a year ago. 

Key Quotes: 

“With the fall in gasoline prices that started in the summer of 2018 now in the rear view mirror, headline inflation should have gotten a sizeable boost in March. A rise to 1.9% will be the hottest inflation reading seen since December, but a stabilization in the price of oil should restrain further upside momentum in price pressures in the coming months.”

“After a surprisingly soft February driven by a fall in auto prices and medical goods, core price pressures should have advanced by a trend-like 0.2% in March. That will leave core inflation at an underwhelming 2.1%. 

“With the link between higher wages and inflation more subdued now relative to previous economic cycles, the Fed should remain comfortably on the sidelines this year. Indeed, core PCE price pressures should have remained a few ticks below the Fed’s 2% target in March.”

“We are a touch above consensus on headline price pressures, but we would need to see a surprise in core inflation for markets to take much note.”