US: Headline CPI inflation expected to stabilize at 2.7% y/y in March – TD Economics

Analysts at TD Economics expect US headline CPI inflation to stabilize at 2.7% y/y in March, with prices flat on the month. 

Key Quotes

“Energy prices will be a net drag, reflecting a dip in gasoline prices. We expect a further firming in food prices on the back of global commodity reflation and a healthy 0.2% m/m print in the core index, the latter leading the core inflation rate higher to 2.3% y/y. Driving the acceleration in March core inflation are shelter prices along with a further bottoming out of core goods prices, which remained in deflation territory through February.”

“Risks to our forecast are roughly balanced, with a few pockets of weakness (vehicle prices) offset by steady strength in services prices and firmer fundamentals (rising pipeline pressures, diminished exchange rate pass-through).”