-
US inflation much more likely to be transitory this time around
US headline CPI showed prices rising 0.9% month-on-month in March, as expected by the market, with a 21.2% MoM jump in gasoline prices contributing the bulk of upside impetus. Airline fares rose 2.7% MoM and apparel prices rose 1%. However, excluding food and energy, inflation was softer than feared, rising only 0.2% MoM/2.6% YoY versus expectations of a 0.3%/2.7% outcome. This was thanks largely to a 0.4% drop in used car prices, a 0.2% decline in medical care and a 0.4% decline in "other goods & services”. Housing costs, the single biggest component by weight, rose 0.3%. The economy has handled tariffs well, ... (full story)