March CPI to leave door open for Fed June rate cut according to BofA

BofA’s preview for this week’s US CPI report.

• Energy: Even though energy prices are higher, gasoline prices usually rise in March. Which means the seasonally adjusted rise might not be as scary for energy.
• Car prices: Sees a decline in core goods, mostly driven by a drop in used and new car prices.
• Core services: Expect non-housing services to pull core services lower. Looking for core services ex rent and OER to show only a modest 0.2% increase versus last month’s 0.5% jump. The biggest contributors to the slower pace are airfares and lodging away from home.

The bank thinks a print in line with market expectations leaves a June cut on the table.