Market Pulse | Volume 94

The surge in energy prices helped drive headline CPI inflation up to a new 40-year high of 8.5% in March, but with base effects set to become much more favorable and signs that monthly gains in core prices are moderating, we expect that to mark the peak.

The 18.3% month-over-month jump in gasoline prices resulted in an 11% month-over-month surge in CPI energy, enough to drive overall headline consumer prices up by a huge 1.2% month-over-month. But with crude oil prices now falling back, that move will be partly reversed in April, and we expect energy inflation to decline significantly over the rest of this year.