Estimates from Bloomberg indicate that March’s Consumer Price Index (CPI) is expected to show that prices fell further over the past month. The latest CPI report is expected to be released on Wednesday.
Forecasts have the CPI coming in a 5.2%; down from February’s 6% annual gain. If accurate, this figure would be the slowest annual increase in consumer prices since May 2021. Monthly increases are expected to slow down to 0.2% from February’s 0.4% increase.
Despite being expected to slow down, the forecast for March’s CPI is still well above the Federal Reserve’s 2% target. For more than a year, the Federal Reserve has embarked on an aggressive interest rate hike to drive inflation downwards. Still, even if this strategy was to succeed, the Fed would risk sending the U.S. economy into a recession by increasing rates too high too fast.
“Core inflation, and core services, should remain sticky-high,” Bank of America analysts said in a note on Monday. “Much of this stickiness stems from elevated rent and owners’ equivalent rent inflation, which should subside in the second half of the year.”