March CPI and the Fed's next steps in its inflation battle: Everything to know

Well, well, well if it isn't another CPI day. Phil Rosen here — March's inflation report is due at 8:30 a.m. ET today.

Here's how FactSet data predicts things to shake out: 

• CPI climbed 0.3% in March, versus 0.4% in February
• CPI year-over-year climbed 5.2%, versus 6.0% in February

Morningstar chief economist Preston Caldwell said he'll be watching "super core inflation," or core services excluding housing, for clues to the Fed's next move.

"Super core inflation in the CPI report has shown no signs of abating yet," he wrote in a note. "But falling wage growth would suggest that inflation in this category should moderate."

Most strategists I've spoken to have said the Fed's likely done or close to done raising interest rates, and a pause could be the next phase, given the fallout from last month's financial turmoil that started with Silicon Valley Bank collapsing.

Economists polled by Bloomberg expect one more 25-basis-point hike in May, and then a mild recession to unfold in the second half of the year.

Below, I'm breaking down how the world's largest asset manager expects the inflation story to pan out in the long-run.

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1. BlackRock just said the Fed won't be able to bring inflation down to its 2% target — they expect policymakers to stop tightening well before they get anywhere close to that mark.

The firm's strategists pointed out this week that inflation has sparked a cost-of-living crisis, and the Fed has responded with an all-out bid to cool prices. 

But the emphasis on prices has left out discussion about how the Fed's tightening will affect economic growth and the labor market, and BlackRock expects that to change.

"We think the 'politics of inflation' narrative is on the cusp of changing," the strategists said. 

That means, according to BlackRock, Americans are just going to have to live with high inflation. 

"We do see inflation cooling as spending patterns normalize and energy prices relent – but we see it persisting above policy targets in coming years," they said.

To be sure, Friday's jobs data showed that the economy and labor market has so far stayed resilient, despite nine consecutive interest rate hikes. 

But BlackRock isn't convinced that strength can continue. Strategists pointed to an aging population, geopolitical fragmentation, and the transition to a lower-carbon world as factors that will keep inflation high.

In their view, getting inflation down to target will ultimately require a "major recession."

What's your inflation outlook for the fourth quarter of 2023? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.

In other news:

2. US stock futures edge higher early Wednesday, ahead of the key consumer inflation print. Minutes from the Federal Reserve's March policy meeting are also due out later today. Here are the latest market moves.

3. On the docket: Synopsys, Bank of New York Mellon, and more, all reporting.

4. Meet the top tech analyst who predicted the sector's steep rebound this year. Long-time bull Dan Ives shared three reasons why the rally can continue through the rest of the year — and his 13 favorite stocks to buy right now.

5. The two-year Treasury is acting like a meme stock. At least according to one strategist who's been watching the key indicator swing wildly over recent months. She said the inverted yield curve is telling the Fed it's making a mistake by not cutting rates.

6. Russia's economy is confusing the world's top forecasters and economists. The uncertainty of war and ambiguity of data coming out of Moscow have made predictions a complicated task — and everyone from Goldman Sachs, the IMF, and the World Bank seem to have different takes on what comes next.

7. These three under-the-radar signals suggest that a US recession isn't as close as you might think. While most investors are bracing for a downturn around the corner, DataTrek Research isn't so sure. Find out what gas prices have to do with it.

8. A chief economist who called the 2008 recession said the economy's already begun to unravel. He said any downturn will be apparent as soon as the next couple months: "We expect to see payrolls falling in the summer, pushing up the unemployment rate."

9. Matthew Tuttle got the financial world buzzing with ETFs that short everything Cathie Wood and Jim Cramer buy. He explained why he's betting against the two popular market gurus — and what he might target next.

10. Bitcoin is on the move as it remains solidly in place as the year's best-performing asset. The token surged above $30,000 for the first time in 10 months a day ago, and as a result crypto-related stocks like Coinbase and MicroStrategy have rallied.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com.

Edited by Jason Ma in Los Angeles and Hallam Bullock (@hallam_bullock) in London.