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US inflation continues to climb higher

Despite March’s higher CPI print, core inflation rose slightly slower than forecast.

12 April 2022

US inflation continues its inexorable grind higher with a March CPI print of 8.5% year-on-year, slightly ahead of market expectations of 8.4% and reminiscent of a time 41 years ago when I was just a young pup in shorts working out how on earth I would ever gather enough pocket money together to buy this new-fangled thing called a Walkman. The minor positive, if there was one, to this latest inflation print was that core prices (that ironically exclude those most core things consumers need the most, such as food and energy!) rose slightly slower than forecast at 6.5% year-on-year versus 6.6% expected. Russia’s incursion into Ukraine and the subsequent knock-on effects on gas prices led to a disproportionate impact - accounting for more than half of the monthly gain in the inflation data. Inflation at these levels may be near peaking as minor evidence of demand destruction exerts itself but it is a very long road of Federal Reserve rate hikes that we will have to travel down before this once-called ‘transient’ genie is back in the bottle.

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Charles Hepworth

Investment Director
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