CPI Data Expectations: Analyzing March US Inflation – by FXstreetNews Inflation EconomicIndicator SEO UnitedStates Fed
he US Dollar has been struggling to gather bullish momentum despite having outperformed its major rivals for a couple of days following the upbeat March jobs report. Markets are still undecided regarding the Federal Reserve’s next policy action and inflation developments could provide fresh clues.On an annualized basis, the Consumer Price Index data is forecast to decline to 5.2% and the Core CPI, which excludes volatile food and energy prices, is expected to edge a tad higher to 5.6% from 5.
Meanwhile, the headline CPI data is seen rising 0.3% MoM in February, compared with a 0.4% increase reported in February. Similarly, the Core CPI is projected to increase by 0.4% in the same period, down slightly from 0.5% previously. The US CPI data will hold the utmost relevance, as the Federal Reserve tries to figure out whether another rate hike will be needed to bring inflation back down to the 2% target. Renewed concerns over the negative impact of rising interest rates on financial stability following the collapse of Silicon Valley Bank forced the Fed to adopt a cautious stance at its last policy meeting on March 22. The Fed hiked its policy rate by 25 basis points to the range of 4.
While speaking at the post-meeting press conference in March, Federal Reserve Chief Jerome Powell said that the story on disinflation was intact. Although Powell also reiterated that they are not yet seeing progress on core services inflation ex-housing, he acknowledged that they need to be alert when thinking about further rate hikes given the potential impact of credit tightening on the economy.rose by 236,000 in March, slightly below the market expectation of 240,000.
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