Industrial releases commentary on US inflation data for March 2026: Impact of oil prices emerging, attention on US-Iran negotiation trends.

Industrial publishes commentary on the US inflation data for March 2026. The impact of oil prices is evident, and the US CPI for March rose as expected. Due to the ongoing escalation of tensions between the US and Iran, the rising international oil prices had an impact, causing a noticeable increase in both the month-on-month and year-on-year US CPI in this period. The performance largely met market expectations, with a 0.9% increase in the year-on-year growth rate to 3.3% and a 0.6% increase in the month-on-month growth rate to +0.9%. The retail price of gasoline in the US increased significantly in March, leading to a 12% increase in the year-on-year growth rate of the energy component of the CPI to 12.5% and a 10.24% increase in the month-on-month growth rate to 10.87%, contributing to approximately 0.7% of the overall CPI increase month-on-month, nearly single-handedly contributing to the entire increase in inflation in this period. Core goods inflation rebounded, with rising prices of new cars being the main support. (1) The month-on-month increase in prices of imported goods with a high reliance on imports decreased. The year-on-year growth rate of furniture CPI in March increased by 0.1% to 4.0%; the month-on-month growth rate narrowed by 0.15% to 0.20%. The year-on-year growth rate of clothing CPI increased by 0.9% to 3.4%; the month-on-month growth rate narrowed by 0.25% to 1.03%. The weakening transmission of tariff costs to selling prices after the cancellation of the IEEPA tariffs, or the main reason for the month-on-month increase in prices of imported goods with a high reliance on imports in this period. (2) Prices of new cars rose, while the decline in prices of used cars widened. The year-on-year growth rate of new car CPI in March remained stable, with a month-on-month growth rate of 0.06% to 0.1%. The Kelley Blue Book report showed that part of the reason for the increase in the selling price of new cars in the US in March was due to an increase in the proportion of high-end models in the sales structure. The year-on-year decline in CPI for used cars and trucks in March remained stable, with a month-on-month decline widening by 0.04% to -0.42%. The divergence in the trends of new car and used car prices is a reflection of the current "K-shaped differentiation" in the US economy. Service inflation: Rent increases maintained resilience, while super core inflation continued to slow month-on-month. (1) Rent: Year-on-year decrease, month-on-month strengthening. The year-on-year growth rate of rent CPI in March decreased by 0.1% to 3.1%, with a month-on-month growth rate expanding by 0.03% to 0.3%, remaining the main support for core CPI. (2) Super core inflation: Year-on-year increase, month-on-month weakening. The year-on-year growth rate of super core CPI in March expanded by 0.4% to 3.1%; the month-on-month growth rate narrowed by 0.14% to 0.13%, influenced by the increase in fuel costs and the closure of airports in Middle Eastern countries, with noticeable increases in ticket prices both year-on-year and month-on-month in this period. However, the decline in prices of services consumption such as healthcare and entertainment dragged down or reduced the growth rate of super core inflation month-on-month. Inflation meeting expectations supports the Federal Reserve's decision to hold, with attention on the progress of the US-Iran ceasefire negotiations. Although the US CPI for March rose significantly month-on-month and year-on-year under the impact of high oil prices, overall it did not "get out of control," with core inflation relatively mild and weaker than market expectations. After the data was released, market tightening expectations eased slightly: the three major US stock indices collectively rose after opening, and the US dollar index weakened. The strong performance of the March non-farm employment data, combined with overall inflation meeting expectations and mild core inflation, further strengthened the Federal Reserve's reason to hold. Looking ahead, the ongoing tensions in the Middle East and their transmission to oil prices and inflation expectations remain key factors affecting the trend of US inflation and the Fed's monetary policy path. Although the US and Iran have temporarily declared a ceasefire and started negotiations, there are still significant differences between the two sides on core issues, and the conflict risk has not been completely eliminated. Subsequent attention will focus on the progress of the US-Iran ceasefire negotiations and the transmission effect of high oil prices on core inflation. Risk warning: US inflation persisting above expectations, Federal Reserve rate cuts less than expected.