Bankinter | The CPI rose slightly less than expected in March: 3.3% against an estimate of 3.4% and a previous reading of 2.4%. Core rate 2.6% compared to an estimated 2.7% and the previous 2.5%.
Analysis team’s view: the monthly figure (0.9% month-on-month) is the highest since June 2022, driven by the energy shock following the outbreak of the conflict in the Middle East. The rise excluding energy is more moderate (0.2% month-on-month) The rise in commodity prices and other components (fertilisers, aviation fuel, plastics, etc.) resulting from the conflict takes longer to be passed on to consumers, so the full impact of the conflict has not yet been fully reflected in the March figure. Despite this being a better-than-expected reading, Fed rate cuts will have to wait. Following the impact of the tariff shock on prices, an energy shock is now beginning. Furthermore, the labour market is in balance and does not require stimulus.
We expect just one cut in 2026, towards the end of the year.
