US CPI: Gasoline prices to push headline CPI higher – TDS

By FXStreet Research Team at TDS, suggests that a higher gasoline prices are expected to push headline CPI up a further 0.3% m/m (up 0.262% m/m at 3 decimal places).

Key Quotes

“This will mark the fastest monthly pace of headline price gains since May last year, bringing to an end a prolonged period of subdued headline inflation performance. Besides the 2.1% m/m gain in energy prices, which should be flattered higher by the 6.0% m/m rebound in gasoline prices, food prices are expected to edge modestly higher. On a year ago basis, the annual pace of headline consumer price inflation should accelerate to 1.0% y/y from 0.9% y/y. However, with base effects becoming less favorable in the coming months, the outlook is for some modest easing in headline inflationary pressures into midyear, with the annual inflation rate falling back to 0.8% y/y by July.

Core inflation momentum should remain subdued, rising at a 0.1% m/m pace (up 0.142% m/m at 3 decimal places), following the equally disappointing performance the month before. Despite the monthly advance, core inflation is expected to decelerate to 2.1% from 2.2%. Core inflation should remain fairly subdued for the remainder of the year.

A broadly in line consensus expectation …read more

Source:: FX Street