The third consecutive 0.4% m/m increase in core CPI in March, coming on the heels of the 303,000 surge in non-farm payrolls, fuelled fears that a pick-up in the real economy is now translating into a resurgence in inflation too. We are not convinced. Nevertheless, we now expect the Fed to delay the first rate cut until September and anticipate only one further 25bp reduction this year, in December.
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