On Friday at 8:30 PM, the United States will release the March CPI data, with expectations that the CPI annual rate will record 3.3%, higher than the previous 2.40%; the monthly rate is expected to be 0.9%, higher than the previous 0.30%.

Core CPI excluding food and energy is expected to increase by 0.3% month-over-month, higher than the previous 0.20%; year-over-year growth is projected to rise to 2.7%, above the previous 2.50%.
Double Pressure
Many institutions predict that, due to the dual squeeze of soaring energy prices and tariff transmission effects, the March CPI data may see a "burst" rebound, which will not only break the steady trend since early 2026 but may also force the Federal Reserve to reassess its monetary policy path.
According to EIA data, all regular gasoline grades rose to $3.914 on March 31, a significant increase of about 35% from $2.89 at the end of February. Based on weighting calculations, gasoline accounts for nearly 3% of the CPI basket, and this alone could contribute 0.5 to 0.6 percentage points to the March CPI increase.
In addition, gasoline prices are currently near their historical high range, similar to inflation periods in 2007-2008 and 2022. If prices do not decline rapidly, they may align with a long-term inflation system. Looking at fuel prices from 2010 to 2016, this rise will undoubtedly trigger chain reactions affecting overall economic growth.
Although recent geopolitical tensions have temporarily eased, causing a slight pullback in oil prices, wholesale prices have already transmitted to the retail level. Troy Mu Yi believes that if energy costs remain high, inflation shocks could persist throughout the first half of the year.
Beyond visible oil prices, more sticky inflation pressures are spreading in the goods sector. Due to current trade tariff policies, input costs in food, household appliances, and personal care are continuously rising.
Fed Rate Cut Space Is Being Shrunk
Currently, inflation data is forcing the market to reprice. The federal funds futures market has already shown a significant shift, with the previously expected rate cut space rapidly shrinking.
Due to strong non-farm employment data in March and the risk of inflation rebound, the Fed is now in a "dilemma": on one hand, the economy has not yet fallen into recession with resilience; on the other hand, inflation levels are far above target.
In the short term, if the CPI data meets or exceeds this "hot" expectation, the market will have to face the reality of "higher for longer" interest rates, and even be alert to the possibility of the Fed restarting rate hike discussions.
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