A Hot CPI Report Could Force A Major Market Repricing

Headline CPI is forecast at +0.9% m/m and +3.3% y/y for March, driven by a ~35% jump in gasoline that could add roughly 0.5%–0.6% (50–60 bps) to monthly CPI. If gasoline prices remain elevated into April, inflation upside could persist, increasing pressure on interest rates and posing a downside risk to risk assets and bond markets.

Analysis

Headline CPI is forecast at +0.9% m/m and +3.3% y/y for March, driven by a ~35% jump in gasoline that could add roughly 0.5%–0.6% (50–60 bps) to monthly CPI. If gasoline prices remain elevated into April, inflation upside could persist, increasing pressure on interest rates and posing a downside risk to risk assets and bond markets.