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Apr 12 - 10:55 AM

USD: CPI: Core Inflation Weaker Than Expected But Still Inline With 50bps Hike At Next FOMC - CIBC

By eFXdata  —  Apr 12 - 09:00 AM

CIBC Research discusses its reaction to today's US CPI print for the month of March.

"Inflation heated up in the US in March, as the surge in gasoline prices left total inflation at 8.5% y/y, a tick above expectations. Excluding energy and food prices, core monthly prices were weaker than expected at 0.3% (vs. 0.5% expected), which left the annual rate of inflation at 6.5%, still a tick hotter than the prior month's reading. The softer-than-expected monthly core advance included a 3.8% drop in used car prices against climbs in shelter and air fare prices. March will likely be the peak for inflation as the indices will be lapping some strong year-ago readings starting in April, while gasoline prices have eased off lately," CIBC notes.

"Still, in order to achieve on-target inflation in 2023, the Fed will be inclined to raise rates by 50bps at the next FOMC, followed by a string of 25bps hikes at subsequent meetings, before pausing temporarily in Q4," CIBC adds.

Source:
CIBC Research/Market Commentary

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