10 April 2024
If you are covering the latest US CPI data, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Today’s eagerly awaited CPI data release has revealed yet another unwelcome uptick in headline inflation, which will fuel further speculation around the timing of a Fed rate cut. Inflation increased by 0.4% in March and on a 12-month basis rose to 3.5%, up from 3.2% last month and higher than market expectations. This increase was driven primarily by an increase in energy prices and shelter costs.
“These monthly readings will have dashed any remaining hopes of a Fed rate cut as early as May, as yearly CPI still sits firmly above the FOMC’s 2% target and has been heading in the wrong direction for the past few months. There had been hopes that today’s report would show the hot CPI figures from January and February were anomalous, but while that has not been the case, this recent uptick in inflation could just be a bump and we could see it begin to lower once more in the coming months.
“Central bank officials will be keeping a very close eye on these figures, and today’s print will have done little to quell fears that inflation is proving too stubborn. Markets are still hoping for a rate cut this summer, but the Fed will be looking for consistent signs of disinflation in the coming months before making the call.”
