美国通胀前景：油价上涨威胁短期飙升

Stuck in the inflation moment The further increase in oil prices threatens a near-term surgein headline inflation, but we continue to expect core inflationto moderate later this year. Businesses and households areseeing theeffectsof higher oil prices, but Fed communicationcalmed worries about incoming rate hikes. •We continue to expect m/m core inflation to moderate later this year. However, the escalatingconflict with Iran has driven oil prices sharply higher, threatening a near-term surge inheadline inflation and putting the inflation outlook at risk if oil remains elevated for longerthan expected. •Businesses are seeing theeffectsof higher input prices, with the March ISM manufacturingsurvey indicating input prices at the highest level since mid-2022. Consumers raised theirshort-term inflation expectations in March but their longer-run inflation expectations remainanchored. •Consumer spending was solid in February, with strong retail sales, and manufacturing activityseems to have increased again in March. The labor market remains stable amid low turnover. •Communication from FOMC participants this week calmed worries about incoming rate hikes,with Powell arguing that the FOMC is inclined to hold rates steady and to look past the energyshock. Inflation remains a concern amid elevated oil prices The conflict with Iran was again top of mind this week, with markets responding to PresidentTrump's address to the nation on Wednesday night by further boosting oil pricesafterhopes ofa quick end to the war were dashed. Trump vowed to continue to hit Iran hard in the comingweeks while providing few concrete measures to open the Strait of Hormuz. WTI brieflysurpassed $112/bbl before retracing some of that increase. At the time of writing, WTI averages$83 for the rest of the year, based on futures, $3 above our baseline assumption (Figure 1). The outlook for inflation depends critically on the path of oil prices and our baseline projectionsremain conditional on oil prices gradually descending this year. Accordingly, we expect nextweek's March headline CPI to print 0.9% m/m (3.3% y/y), led by a surge in gasoline prices. Thatwould be the hottest CPI print since May 2022. Meanwhile, we expect core CPI to show a 0.26%m/m (2.7% y/y) increase, driven by core goods (Figure 2). These firm prints would come amid a backdrop of firm core PCE inflation, with core PCE pricesincreasing 0.4% m/m in December and January, and expected to have risen by as much inFebruary. For March, we expect core PCE inflation to moderate some but to remainuncomfortably elevated at around 4.1% on a 3mma annualized basis. We continue to expectmonthly core inflation rates to moderate substantiallyafterApril (when distortions to rent andOER inflation related to last Fall's government shutdown get undone), when theeffectsoftariffs increases will have largely passed through consumer prices, while rent and OER inflationcontribute to asoftening,and non-housing services price inflation remains moderate, led bymodest wage growth. Specifically, we expect monthly core CPI and core PCE inflation prints tomoderate to the low 0.2's for the rest of the year. That would bring core PCE inflation to 2.8%Q4/Q4 for the year. Our inflation outlook, however, remains dependent on the duration of the conflict. Were oilprices to remain near $100 for the rest of the year, we would likely see headline inflation averagecloser to 4% y/y for much of the year, and core inflation would likely not moderate as much aswe anticipate in our baseline, as discussed in No end in sight (yet). Businesses are undoubtedly seeing theeffectsof higher input prices. The March ISMmanufacturing survey indicated that input prices surged by 7.8pts to 78.3, following anothersharp increase in the prior month. The input prices index is now at the highest level sincemid-2022. While oil prices are a key contributor, survey respondents pointed also to primarymetal prices (aluminum, steel, copper, etc.), which we had highlighted at the beginning of theyear as being an upside tail risk to inflation this year. Unlike fuel, consumers have only anindirect exposure to metal prices in the spending basket, soeffectscould take time to percolatethrough to retail consumer prices. Longer-run inflation expectations still anchored The recent surge in energy prices have notlefthouseholdsindifferent.Consumers raised theirshort-term inflation expectations in March, with the 1-year University of Michigan inflationexpectations increasing 0.4pp, to 3.8%, and the Conference Board's (median) measureincreasing a more significant 0.7pp, to 5.2%. However, for the time being, households appear totrust that inflation will ultimately reverseafterthe cost-push shock has passed through: longer-run measures of inflation expectations have remained anchored so far, with the U Mich 5-10year inflation expectations edgingdown0.1pp to 3.2% in March. Next week, we will be on thelookout for the NY Fed's measures of household inflat