Pimco: U.S. CPI Report Preview

Pimco: U.S. CPI Report Preview

April 11, 2023

Inflation United States
Inflatie (05) rente

By Tiffany Wilding, Managing Director and North American Economist at PIMCO

  • We forecast core prices increased 0.4% in March, which would bring the y/y rate back up a tick to 5.6% (vs 5.5% in Feb). This is obviously a short-term setback for the Fed. However, inflation was never expected to decelerate in a straight line, and notwithstanding this report we anticipate inflation will to continue to fall over the course of the year, eventually ending the year running around 3-3.5% .
  • In the March report, we’re watching for signs that the recent declines in listed rents are showing up in the Consumer Price Index. In addition, services ex-shelter inflation will be a focus. We also expect this series to continue to moderate as lower energy prices are passed onto consumer through moderating transportation services inflation. Measures of wage inflation have also moderated recently.
  • More broadly, we think the strong employment report, hawkish tone of recent Fedspeak, and our expectations for a firm CPI report all point to one more rate hike in May, absent another bout in market stress.

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