US CPI data expected to show inflation eased in March, supporting dovish Fed rate cut path
- The US Consumer Price Index is forecast to rise 2.6% YoY in March.
- The core CPI inflation is seen a tad lower at 3% last month.
- The inflation data could influence the Fed’s rate outlook and the US Dollar’s performance.
The United States (US) Bureau of Labor Statistics (BLS) is set to publish the high-impact Consumer Price Index (CPI) inflation report for March on Thursday at 12:30 GMT.
The CPI figures could notably impact the US Dollar (USD) and the Federal Reserve’s (Fed) monetary policy outlook.
What to expect in the next CPI data report?
As measured by the CPI, inflation in the US is set to rise at an annual pace of 2.6% in March, down slightly from the 2.8% reported in February. Core CPI inflation, which excludes the volatile food and energy categories, is expected to ease to 3% in the same period from a year earlier, compared to a 3.1% growth in the previous month.
On a monthly basis, the CPI and the core CPI are projected to rise 0.1% and 0.3%, respectively.
Previewing the report, analysts at TD Securities noted: “We expect this week’s CPI report to show that core inflation maintained a still firm 0.26% m/m pace in March following the cooler than expected expansion in the last report. In the details, we look for goods inflation to cool down after two consecutive firm increases while services prices likely gained some momentum.”
“In terms of the headline, we project CPI inflation to ease again to a mild 0.07% m/m in March, led by a considerable contraction in the energy component. We also expect food inflation to lose additional momentum, printing flat m/m,” TD Securities analysts added.
