CIBC Research discuses its reaction to today's US CPI print for the month of March.
"Lower energy prices eased overall price pressures in the US in March, but the pace of core inflation remains too hot to be comfortable. Core inflation decelerated one tick in March to 0.4% m/m, in line with consensus expectations. The annual rate for core inflation now stands at 5.6%. Once again, shelter was the largest contributor to the monthly increase, though airline fares, household furnishings and operations and new vehicle prices also rose. In what is excellent news for consumers, food prices held steady in March after months of strong gains, with food at home even declining 0.3% on the month. Combined with energy prices which fell meaningfully, that left headline inflation with a small 0.1% monthly advance, or 5.0% y/y, a tick below consensus expectations," CIBC notes.
"However, the pace of core inflation maintains the case for a follow up rate hike by the Fed in May provided banking system issues looks sufficiently stable," CIBC adds.