The Consumer Price Index (CPI) for March showed inflation rose by 0.3%, which is cooler than the estimated 0.4%. Year-over-year inflation decreased from 3.5% to 3.4%.

The core rate, which strips out food and energy, increased by 0.3%, as expected.

Here are the numbers:

• Energy prices rose by 1.1%
• Gasoline prices increased by 2.8%
• Auto insurance rose by 1.8%, up 23% year-over-year
• Used car prices fell by 1.4%, and new car prices dropped by 0.4%
• Shelter costs, which make up 45% of the CPI, rose by 0.4% but declined from 5.7% to 5.5% year-over-year
• Rents, similar to shelter, declined year-over-year from 5.7% to 5.4%
• Retail sales were flat, compared to an expected 0.4% increase.

The market is pricing in two rate cuts by the end of the year. These numbers strongly indicate that inflation is dropping and that the dreaded word “stagflation” will not rear its head.