Economist: US March CPI MoM Could Surge 1%, Fed May Face Rate Hike Challenge This Year

BlockBeats News, April 5th - Economists say that the sudden rise in gasoline prices felt by U.S. consumers will be fully reflected in key inflation data to be released this week. U.S. CPI for March is expected to rise by 1% month-on-month, the largest monthly increase since 2022; core CPI may rise by 0.3%.

Prior to this, the Iran war drove U.S. gas station gasoline prices up by about $1 per gallon. The day before the CPI data is released, the Fed's favored inflation gauge will provide information on pre-war price pressures.

Economists anticipate that the core PCE price index may have risen for the third consecutive month by 0.4% in February, indicating that the process of inflation easing to a more moderate level has stalled even before the conflict erupted. Combined with signs of stabilization in the U.S. labor market, persistent price pressures, and new inflation risks from the Middle East conflict, this helps explain why the Fed may find it difficult to lower rates this year. (FXStreet)