Consumer price inflation in March is expected to have risen the most since December 1981, driven by higher food costs, rising rents and runaway energy prices.
"The problem for the Fed is the broadening of inflation from goods into services and also because used car prices might be picking up again," said Swonk."The supply chain issues aren't going away. They're getting worse."
The Federal Reserve is expected to tighten policy aggressively to rein in the hottest inflation in four decades. Markets expect a half point hike in May, and economists say a hot inflation report could also bring a half point hike in June. The Fed first raised interest rates by a quarter point in March, after cutting the fed funds target rate to zero in early 2020.
Simons said energy prices in CPI are expected to jump 18% in March."That first half of March was particularly acute post-Russian invasion. Food prices are a similar story but not nearly to the same extent. ... Housing again is going to be a pretty significant factor," he said.
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