According to Jinshi, the US underlying inflation may slow down for the first time in 6 months in April, and price pressures are expected to start to ease again. The core CPI is expected to rise by 0.3% month-on-month, after rising by 0.4% in the previous three months, and is expected to rise by 3.6% year-on-year. Although this increase will be the smallest in three years, it is still too fast to appease the Federal Reserve.
The headline CPI likely rose 0.4% month-on-month for the third straight month as gasoline prices hit a six-month high. While core commodity prices have largely retreated, the cost of basic services remains high, which explains why inflation was stubborn in the first quarter.
“The core CPI report for April may look encouraging, slowing from March — but the PCE data for April is still likely to be strong, which is the bigger concern for the Fed,” said analyst Anna Wong.
