UBS: Lag suggests inflation should be moderate tonight.

UBS Chief Economist Paul Donovan pointed out that although the US February Consumer Price Index (CPI) data comes before the recent market turmoil, it remains crucial for the Federal Reserve's policy-making. He expects the underlying inflationary pressures reflected in today's data to be moderate, and believes the Fed should only respond to broad-based price increases. Donovan emphasized that the Fed lacks policy tools to deal with isolated market disturbances. He also noted that the nearly 27% increase in gasoline prices from their January lows will not be reflected in today's data, but consumers will notice a surge in the prices of some grocery items. (Jinshi)