Analysts at Bank of America Securities believe that after two firm reports to start the year, core CPI inflation should cool off in March.
The firm said in a note that they expect core CPI inflation to round down to 0.2% month-on-month (0.24% unrounded) owing to a slight decline in core goods prices and less price pressure from core services.
"Meanwhile, headline CPI should round up to 0.3% m/m (0.25% unrounded). If our forecast proves correct, it should provide some confidence to the Fed," said Bank of America Securities.
Overall, Bank of America Securities feels that a report in line with their expectations would leave them more confident with the call for the Fed to start its cutting cycle in June.
"The market, which is currently pricing in a 70% likelihood of a 25bp in June, and members of the Fed would also be encouraged," they stated.