US stocks go nowhere ahead of CPI data

Atlanta Fed president Raphael Bostic spoke to Yahoo Finance’s Jennifer Schonberger on Tuesday — just ahead of critical CPI inflation data.

The central bank leader said a CPI print that comes in line with consensus estimates would be a “welcome development” in the Fed’s fight toward 2% inflation. Still, he expects “some bumpiness,” noting he sees inflation decelerating “at a very slow rate” throughout the course of the year.

The inflation report, set for release at 8:30 a.m. ET, is expected to show headline inflation of 3.4%, an acceleration from February’s 3.2% annual gain in prices, according to estimates from Bloomberg. Higher energy costs, fueled by a jump in gas prices, are expected to have driven the increase.

On a “core” basis, which strips out the more volatile costs of food and gas, prices in March are expected to have risen 3.7% over last year — a modest slowdown from the 3.8% annual increase seen in February, according to Bloomberg data.

Bostic, who only expects one rate cut in the fourth quarter, said it’s possible the Fed may need to delay cuts “even further out” given the strength of the US economy. Still, if the disinflation pace resumes, the central bank could pull its cuts forward.

“Ultimately it will depend on what the data shows,” he said.

In terms of growth, Bostic said the “US economy has been incredibly resilient.” Just last week, a strong labor report showed the US economy added more jobs than expected in March as the unemployment rate decreased while wage growth held steady.

“I’m actually very grateful the economy is producing a lot of jobs, that output is up, that wages are up. These are all good things,” he said. “My outlook is still that the economy will slow but not nearly as much as I had anticipated in January.”