In the continuing saga of the Consumer Price Index, the March report showed a monthly increase below industry estimates. CPI was up 0.1% for the month and 5% from a year ago. The annual figure was 5.6% when excluding food and energy (core CPI). (Source: CNBC)

This news was taken as a sign the Fed's rate hikes are working. The FOMC will meet May 2-3 to discuss the potential for a further rate hike.

Looking ahead to Q1 GDP figures, First Trust estimated an increase of 2.3% to real GDP in the first quarter of the year, noting "that is unlikely to be repeated" in Q2. They also noted in their Monday Morning Outlook:

"The US economy is being tugged in two different directions right now. On the positive side we have the lingering effects of the massive stimulus of 2020-21, the renormalization of the service sector after COVID Lockdowns, and, as always, the entrepreneurial and innovative spirit of the American people. On the downside we have the early stages of a drop in the money supply that started last year and too much government spending.

"The problem with forecasting the economy right now is we have never been in this position before, where an unprecedented two-year surge in the money supply (plus massive temporary transfer payments) were closely followed by a dive in the money supply unlike anything we’ve seen in decades."