US CPI Disappoints at Core and Headline Level - ING
Rob Carnell, Chief International Economist at ING, suggests that weaker
than expected US inflation figures make it even more likely that the
April FOMC is a non-event.
Key Quotes
“Even
with rising retail gasoline prices pushing up the energy component of
CPI by 0.9% mom, softness across many of the other components of this
release led to a muted 0.1% mom increase, and core CPI was equally soft
at 0.1% mom too. Headline March inflation has fallen back to 0.9% YoY,
and core inflation has drifted back to 2.2% from 2.3% YoY.
Many
of the subcomponents of the CPI release were down on the previous month,
most notably food and beverages (-0.2% mom from +0.2% in February) and
apparel (-1.1% from +1.6%). About the only upside result was tobacco,
which rose 0.5% from 0.2%.
This inflation result follows some
weaker activity data in recent weeks (for example retail sales), and
will make it very difficult for the hawks on the Federal Reserve to make
a persuasive case for a rate hike at the April 27th rate setting
meeting. Even flagging a possible June hike in the April meeting now
seems like a stretch.”
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