What to expect from upcoming March inflation report

Published

2 years ago

April 12, 2023

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close video The Fed risks ‘overshooting’ its inflation, rate hike goals: Diane Swonk

KPMG Chief Economist Diane Swonk says it’s important to remember rapid rate hikes can exacerbate market fragility.

A high-stakes inflation report due Wednesday is expected to show that price pressures within the economy remained strong last month despite an aggressive interest rate hike campaign by the Federal Reserve.

Economists expect the consumer price index, which measures a basket of goods, including gasoline, health care, groceries and rent, to show that monthly prices rose 0.2% in March, down slightly from an increase of 0.4% February. On an annual basis, inflation is projected to have climbed 5.1% at an annual rate, a decline from 6% the previous month and a peak of 9.1% in June.

While that would mark the slowest pace of inflation since May 2021, it remains nearly three times higher than the Fed's 2% target.

Other parts of the report are also expected to point to a slow retreat for inflation, a worrisome sign for the U.S. central bank. Core prices, which exclude the more volatile measurements of food and energy, are expected to climb 0.4% or 5.6% annually, suggesting that underlying price pressures remain strong.

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"Core inflation, and core services, should remain sticky-high," Bank of America analysts wrote in a note Monday,

The report is the last before the Federal Reserve's next policy-setting meeting May 2-3 and will have major implications for the U.S. central bank, which is tightening monetary policy at the fastest rate in decades as it tries to crush out-of-control inflation.

Officials have already approved nine straight rate increases, lifting the federal funds rate to a range of 4.75% to 5%, the highest since before the 2008 financial crisis.

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Markets expect policymakers to approve another quarter-percentage point hike at the conclusion of their meeting next month despite upheaval in the banking system and concerns over a slowing economy.

A man shops for meat at a Safeway grocery store in Annapolis, Md., May 16, 2022. (Jim Watson/AFP via Getty Images / Getty Images)

The probability that the Fed continues its rate hike campaign in May rose to 71% Wednesday, according to data from the CME Group's FedWatch tool, up from 44.8% just one week ago. About 28% of traders, meanwhile, are expecting central bankers to pause the rate hikes.

"The Fed's policy should continue to have the desired impact on price pressures," said Michael Weisz, president of the investment firm Yieldstreet. "However, the target rate of 2% continues to be a long way off from the current path. The 'higher for longer' thesis may include both interest rates, as well as overall price levels, and thus slowing inflation may not happen as quickly as desired."

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Shoppers in a Kroger supermarket Oct. 14, 2022, in Atlanta. (Elijah Nouvelage/AFP via Getty Images / Getty Images)

The Fed is also watching other economic indicators, including job growth and consumer inflation expectations. In another welcoming sign for the central bank, there were indications the labor market softened but did not deteriorate last week.

The March jobs report showed employers added 236,000 jobs last month, the smallest gain since December 2020, and that monthly wages also cooled.

"Employment growth has not yet collapsed, though there are visible signs of continued moderation," said Kathy Bostjancic, Nationwide chief economist. "In all, the Federal Reserve will be pleased by the details of the employment report, but still is supportive of another rate hike in May, which we think could be the last for the tightening cycle, followed by a long pause."

Business

Tesla looks to cheaper model as revenue suffers worst drop in over a decade

Published

12 mins ago

July 23, 2025

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Tesla looks to cheaper model as revenue suffers worst drop in over a decade

Tesla has started limited production on a cheaper model in a bid to boost sluggish demand after revealing its worst slump in quarterly sales for over a decade.

The electric carmaker, effectively run part-time by founder and CEO Elon Musk for much of this year after his now-defunct spell at the heart of Donald Trump’s government, reported a 12% drop in revenues over the second quarter of the year.

Its update showed a total of $22.5bn, despite aggressive discounting and low-cost financing put in place to help shield Tesla from many headwinds.

They include strong competition from cheaper electric vehicles and a backlash against Musk’s former political alignment with the president.

Sales and profits came in lower than analysts had predicted.

Tesla said it was looking to ramp up production of the more affordable model during the second half of this year.

It gave no further details but it is a nod to investor concerns that the appeal of Tesla’s range is restricted when compared to that of competitors.

The results were the first for shareholders to digest since the so-called bromance between Mr Musk and Donald Trump ended acrimoniously in June.

Tesla’s shares remain almost 18% down over the year to date – lagging a recovery among rivals – and were flat in extended trading.

The drag can mainly be explained by the 2025 sales slowdown, Tesla’s particular exposure to the president’s trade war and the often violent backlash against Musk’s former role in the Trump administration which enacted big cuts to federal government spending.

Globally, customers have been put off by interference by Musk in national elections, particularly in Germany, and stiff competition from cheaper alternatives to Tesla’s electric car ranges.

While his departure from Washington allowed the tech tycoon to focus more on his vast business ventures, his beef with the president over the cost of the Big Beautiful tax and spending Bill has left Tesla exposed to retaliation from the White House.

Recent analysis by Sky News showed the extent to which the company’s profitability is threatened through the potential loss of billions of dollars in government subsidies – a sanction threatened by the president.

The latest set of results showed a steady income from these so-called regulatory credits, amounting to $435m between April and June. That was down from the $458m reported for the same period last year.

Tesla had revealed earlier this month that production and deliveries covering the quarter were below expectations.

A total of 384,122 Teslas were delivered in the period, a 13.5% fall on the same period last year.

It marked the second consecutive quarterly sales decline and were not helped by the changeover to the refreshed Model Y.

One other thing investors were eagerly awaiting news on was the supervised self-driving Robotaxi trial – launched last month in Texas.

Videos have since suggested some evident driving mistakes.

Musk has previously said the service would soon reach the San Francisco Bay Area, depending on regulatory approvals, and no update was given on whether papers had yet been filed.

Bloomberg News reported earlier on Wednesday that the company was in talks about operating a Robotaxi service in Nevada.

Technology

IBM shares drop despite earnings beat

Published

59 mins ago

July 23, 2025

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IBM CEO Arvind Krishna appears at the World Economic Forum in Davos, Switzerland, on Jan. 16, 2024.

Stefan Wermuth | Bloomberg | Getty Images

IBM shares fell as much as 5% in extended trading on Wednesday after the tech conglomerate issued second-quarter results that topped Wall Street projections.

Here’s how the company did in comparison with LSEG consensus:

Earnings per share: $2.80 adjusted vs. $2.64 expected
Revenue: $16.98 billion vs. $16.59 billion

IBM’s revenue increased nearly 8% year over year in the quarter, according to a statement. Growth in the first quarter was below 1%. Net income, which includes costs related to acquisitions, rose to $2.19 billion, or $2.31 per share, from $1.83 billion, or $1.96 per share, a year ago.

Software revenue climbed about 10% to $7.39 billion, exceeding the $7.43 billion consensus among analysts surveyed by StreetAccount. Hybrid cloud revenue, including Red Hat, showed 16% growth. The software unit’s gross margin of 83.9% was barely narrower than StreetAccount’s 84.0% consensus.

Revenue from consulting rose almost 3% to $5.31 billion, higher than StreetAccount’s $5.16 billion consensus. Infrastructure revenue went up 14% to $4.14 billion, above the $3.75 billion StreetAccount average estimate.

During the quarter, IBM announced the next-generation z17 mainframe computer and the acquisition of data and artificial intelligence consulting firm Hakkoda.

IBM called for over $13.5 billion in 2025 free cash flow, similar to a projection from April. The company still sees at least 5% revenue growth at constant currency for the year.

As of Wednesday’s close, IBM shares were up 28% so far in 2025, while the S&P 500 index has gained around 8% in the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Cramer’s Stop Trading: IBM

Environment

Tesla (TSLA) releases Q2 2025 financing results: earnings down 23%

Published

1 hour ago

July 23, 2025

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Tesla (TSLA) releases Q2 2025 financing results: earnings down 23%

Tesla (TSLA) released its financial results and shareholders’ letter for the second quarter (Q2) 2025 after market close today.

We are updating this post with all the details from the financial results, shareholders’ letter, and the conference call later tonight. Refresh for the latest information.

Tesla Q2 2025 earnings expectations

As we reported in our Tesla Q2 2025 earnings preview yesterday, the Wall Street consensus for this quarter was $22.279 billion in revenue and earnings of $0.40 per share.

The expectations had been significantly downgraded over the last month, as analysts were surprised by Tesla’s announcement of much lower deliveries than expected in the first quarter.

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How did Tesla do compared to expectations?

Tesla Q2 2025 financial results

After the market closed today, Tesla released its financial results for the first quarter and confirmed that it delivered on expectations with earnings of $0.40 per share (non-GAAP), and it exceeded revenue expectations with $22.496 billion during the last quarter.

Tesla’s earnings per share are down 23% year-over-year amid a booming EV market.

Operating income decreased 42% year-over-year to now less than $1 billion, and almost half of it came from regulatory credits.

Tesla’s cash on hand has decreased this quarter for the first time in years. The company lost about $200 million of its giant war chest – now sitting at $36.8 billion.

We will be posting our follow-up posts here about the earnings and conference call to expand on the most important points (refresh the page to see the most recent posts):

Here’s Tesla’s Q2 2025 shareholder presentation in full:

Here’s Tesla’s conference call for the Q2 2025 results:

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