March CPI report: Inflation rises more than expected

According to March's Consumer Price Index (CPI) print, inflation rose 0.4% month-over-month and 3.5% year-over-year, slightly hotter than respective estimates of 0.3% and 3.4%. Core CPI — which excludes food and energy costs — also climbed by 0.4% over the prior month and 3.8% over the last year.

Morning Brief Co-Hosts Seana Smith and Brad Smith break down the fresh inflation data.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: We've got some breaking data out on inflation this morning. The CPI print just crossing the wires on a year-over-year basis coming in the headline number just a bit hotter than expected at 3.5%. Also on a month-over-month basis coming in just a bit hotter, 4/10th of a percent increase from the previous month. That was in line with what we saw at the prior month there.

When we take a look at the core CPI print on a month-over-month basis, that was also slightly hotter than what the Street was looking for. Growth of 4/10th of a percent. The core CPI print on a year-over-year basis, that was also slightly hotter there at 3.8%. So holding steady from the number that we saw, the increase that we saw last month here.

So a bit of a hotter than expected print here, Brad. And of course, if you're going into this report was that we could see a hotter than expected print. And then the pressure that could put on the markets there quickly as a result.

BRAD SMITH: Yeah, just looking at some of the color behind this report here specifically, as we were taking a look at futures that are in the red right now for the Dow and the NASDAQ and the S&P 500, one huge thing that jumps out to me from this report is the areas here. The food index, particularly-- and we're going to dive into some of these categories with our reporters. Our newsroom is astir right now with all of the different areas that we're covering.

But food index up by about 1/10th of a percent in March. Food at home index, unchanged. Food away from home costing a little bit more. That's up by about 3/10th of a percent over the month. The indexes that increased in March-- and this should come as no surprise-- shelter, motor vehicle insurance, medical care, apparel, and personal care.

And then, those that decrease here-- and this is going to be interesting for folks here to continue to track and keep score at home-- indexes for used cars, trucks, recreation, and new vehicles were among those that decreased over the month. So, areas where consumers, especially on that vehicle sales component, pushing back on prices as well right now.

SEANA SMITH: Yeah, that's really interesting to point out here when you take a look at some of the drops that you were just mentioning there. Used cars and trucks, that was down about 1.1%. It looks like you have for the month, at new vehicles off just about 2/10th of a percent.

But taking a look at the reaction that we're seeing playing out here in the market, taking a look at futures they're under a bit of pressure here. When you take a look at the reaction that we are also seeing in the bond market, we are seeing yields rise on the heels of this hotter than expected inflation print here.

So again, this is what the Street had been bracing itself for. It is the third straight month that we have seen of inflation that has been a bit too hot, at least for the Fed's liking. And of course, brings up the question whether or not we are going to return to that downward trend that we have been seeing in some of the easing pressures across the board.