F1: February's US CPI was anticipated to be closely observed to shape monetary policy and growth expectations, with consensus expecting some stickiness, but also a possibility of easing inflationary pressures supported by PMI prices data indicating potential for future rate cuts [1]. F2: The global economy experienced an acceleration in business activity growth in February, reaching an eight-month high with the headline Global PMI at 52.1. This signals accelerating growth but remains below the survey's long-run average and indicative of annualized quarterly global GDP growth of approximately 2% [1]. F3: Average prices for goods and services worldwide increased at a faster rate in February, despite being among the lowest seen since mid-2021. Services price inflation remained particularly elevated by pre-pandemic standards [1]. F4: The US CPI report for February 2023 predicted inflation increasing at a 3.2% annual rate, higher than expected, primarily due to a spike in gasoline prices, although underlying price and wage pressures were noted to be stickier than Federal Reserve officials may desire [2][3]. F5: The overall CPI reading for February was expected to show a 0.4% growth on a monthly basis, holding the annual growth rate steady at 3.1% [2][3]. F6: Rate cuts remained viewed as likely in 2024 despite higher inflation data in February, with economists and Fed officials seeing room for monetary policy adjustments within the year [2][3]. F7: Core CPI, excluding volatile food and energy prices, demonstrated stickiness over the past year, with expectations for it to rise 0.3% on a monthly basis and 3.7% on an annual basis in February [2][3]. F8: February CPI data anticipated to largely be driven by a rise in gas prices, highlighting concerns over gasoline and goods contributing significantly to inflation narrative [2][3]. F9: Despite expectations of inflation due to specific factors like gasoline prices, analysts did not anticipate significant improvements on the services side of the inflation equation, particularly with costs like shelter [2][3]. F10: Fed Chair Jerome Powell, in Congressional testimony, stated that the central bank was not yet confident inflation was close to its target but suggested rate cuts "can and will" begin this year if the pace of disinflation continues [2][3]. --- SOURCES --- 1: https://www.forbes.com/sites/simonmoore/2024/03/05/what-to-expect-from-februarys-cpi-inflation-report/ 2: https://www.spglobal.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-11-march-2024.html 3: https://www.spglobal.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-11-march-2024.html ----------------- 0.4 Given the continuity in the trend of month-over-month increases in the Consumer Price Index for All Urban Consumers (CPI-U) observed in January and February 2024 (0.3% and 0.4%, respectively), combined with the analysis of underlying and contributing factors through February, a forecast without significant deviation from these figures seems the most supported. The factors contributing to this assessment include: 1. Consistency in Core CPI Increases: The consistent increase in core CPI (excluding food and energy) by 0.4% month-over-month in both January and February 2024 indicates underlying inflationary pressures. This pattern suggests that inflationary pressures are stable and broad-based, not solely dependent on volatile components like food and energy prices. 2. Impact of Gasoline Prices: The sharp increase in gasoline prices in February, as highlighted, adds upward pressure on the overall CPI-U due to its significant weight in the index. This factor is crucial, considering gasoline prices can have a substantial immediate impact on inflation, but the forecast takes into account that such spikes are volatile and can reverse, hence not altering the overall trend dramatically. 3. Economic Growth and Inflationary Pressures: The acceleration in business activity growth and the stickiness in inflationary pressures as observed in PMI data and anticipated in the CPI report suggest a growing economy but with persistent inflation. This scenario typically does not lend itself to sudden drops in inflation rates without intervention or significant economic shifts. 4. Fed Policy and Market Expectations: The Federal Reserve's stance, as highlighted by Fed Chair Jerome Powell, suggests an openness to adjusting policy should disinflation continue but does not indicate immediate drastic measures that would sharply lower inflation in the short term. Market sentiment, influenced by such statements, would likely have already been factored into the inflation expectations and thus the CPI-U trend. Therefore, considering the aggregation of these factors and the trend established in the early months of 2024, it seems reasonable to forecast a continuation of the recent month-over-month inflation rate into March 2024 without significant escalation or deceleration. This projection is made understanding that while there are inflationary pressures, given the consistent increase in core CPI and the impact of volatile components like gasoline, these conditions balance out to produce a steady inflation rate for the month of March. The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in March 2024 on a seasonally adjusted basis.