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The February CPI report was a bit stronger than expected, but the report can probably be dismissed as old news given potential downward pressure on inflation from the COVID-19 crisis and the recent plunge in oil prices, as economists at TD Securities notes.

Key quotes

“The total CPI rose 0.1% m/m in February, above the 0.0% consensus; the TD Securities forecast was 0.1%. The core index rose 0.2%, which matched consensus (and the TD forecast), but the rise was a fairly solid 0.22% before rounding (consensus: 0.16%, TD: 0.19%).”

“The 12-month change in the overall CPI slipped to 2.3% in February from 2.5% in January (consensus: 2.2%, TD: 2.3%). That 12-month change is likely to drop below 2% in March due to the latest plunge in energy prices. The 12-month change in the core index rose to 2.4% from 2.3%.”

“More recent developments suggest slowing ahead. That is certainly true at the headline level due to the collapse in oil prices, but weakening in the economy could lead to some slowing at the core level as well.”


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