Economists See U.S. March CPI Rising 1% MoM; Rate Cuts May Be Hard to Deliver This Year

April 5 — Economists say the sharp jump in gasoline prices paid by U.S. consumers is expected to show up clearly in the inflation data due this week. They forecast the March CPI will climb 1% month over month, the biggest monthly increase since 2022, while core CPI is seen rising 0.3%. Gasoline prices at U.S. pumps previously jumped about $1 per gallon after the war in Iran. A day before the CPI report, the Fed's preferred inflation gauge will offer a read on price pressures before the conflict: economists expect the February core PCE price index to rise 0.4% for a third straight month, indicating disinflation had already stalled even ahead of the fighting. Alongside signs of a stabilizing U.S. labor market, sticky inflation and fresh price risks tied to the Middle East war help explain why the Federal Reserve may find it difficult to cut interest rates this year. (Jin10)