U.S. | CPI report confirms disinflationary headwinds building

In April, consumer prices declined 0.8% over-the-month, in the first signs of a major downdraft in inflation. Today’s numbers were significantly below expectations and marked the lowest monthly decline since December 2008.

Key points

• Key points:
• Given the unprecedented demand-side shock to energy prices from the decline in travel and transportation, gasoline prices fell 20.6% in April
• Our baseline assumes headline prices will decline in 2020, before rebounding in 2021, and for core inflation to remain low in both 2020 and 2021

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