Slowdown in super core CPI would raise Fed’s confidence inflation is moving toward 2% – BBH

Analysts BBH share their views on the upcoming March inflation data from the US.

Pay particular attention to super core CPI

"The US March CPI report is the main event. The data will help determine whether recent high CPI readings were noise or a sign that progress on inflation is stalling. Headline CPI is expected to rise 0.3% m/m and quicken to 3.4% y/y in March from 3.2% in February. Core CPI is forecast to rise 0.3% m/m and slow to 3.7% y/y in March from 3.8% in February. The projections are in line with the Cleveland Fed’s inflation nowcast model."

"Pay particular attention to the so-called super core CPI (core services less housing), a key measure of underlying inflation. In February, super core CPI remained high at 4.3% y/y but the monthly price increase eased to 0.5% from 0.9% in January. A further monthly slowdown in super core CPI would likely raise the Fed’s confidence that inflation is moving sustainably down toward 2%."