CPI Preview: Core Expectations Look Flat

U.S. March CPI data is released at 0830ET/1330BST. BBG survey for core is 0.2% M/M and 1.5% Y/Y (priors: 0.1% and 1.3%). For headline: 0.5% M/M and 2.5% Y/Y (priors: 0.4% and 1.7%).

• The jump in headline inflation is seen driven by surging energy prices, with the 2.5% Y/Y reading set to be the highest since Jan 2020.
• There's nothing extraordinary about the core estimate: over the last 10 years, 95 of the 120 monthly surveys have had a 0.2% M/M median. Nor is there a lot of deviation from consensus, with 0.1% the low and 0.3% the high estimates in the March survey. Only 3/55 surveyed see 0.1% though, with 15 seeing 0.3% - making the survey average a little above 0.2% (0.22%). Arguably there's more potential market impact if there is a downside surprise.
• The broader significance is that many see March as the first in a series of higher inflation prints that will test the Fed's patience in what FOMC officials expect will be a "transient" jump due to base effects. Several analysts are looking for incipient signs that inflation could be stickier than expected, however. A few sell-side notes to follow.