The CPI is expected to show headline inflation rose by 0.3 percent in March, compared to 0.2 percent in February. Core CPI, excluding food and energy, is expected to come in at 0.1 percent, off from the 0.2 percent last month. It is released at 8:30 a.m. ET.
"If you get another reading at 0.2 that makes the Fed feel a little more comfortable about inflation," said Robert Sinche, chief global strategist at Amherst Pierpont. "The core CPI readings are really important. If you get two 0.2s in a row on core CPI, the market will say: 'Maybe there's the start of something here.' "
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Sinche said if it is weaker, like a zero, then the market will see last month's number as an aberration and push back expectations for a rate hike. Currently, most Fed watchers see rate hikes beginning in September or later.
Deutsche Bank chief U.S. economist Joseph LaVorgna said he expects a 5 percent jump in gasoline last month to help the headline number. Core prices should rise moderately, and the year-over-year growth rate should be steady at 1.7 percent.
"The Fed has a litany of excuses as to why it doesn't have to raise rates. Inflation should be up tomorrow because of the higher energy and higher food prices," he said.
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Markets have been more focused on the PCE deflator, the personal consumption price index because it is more closely followed by the Fed. But that data is not released until the end of the month.
"The market in general has paid more credence to core PCE, but I do think this is an opportunity for the inflation data to show the market that it's stabilizing and there's not another leg down in inflation," said Tyler Tucci, short-term markets and interest rates derivatives strategist at RBS.
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Stocks on Thursday were lower, with the S&P 500 off 1 at 2104. Oil was settled slightly higher at $56.71 per barrel, up $0.32.
Other data expected Friday includes leading economic indicators and consumer sentiment, both at 10 a.m.
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Earnings reports are expected from General Electric, Honeywell, Synchrony Financial, Seagate Technology, Reynolds American and Comerica.
The IMF spring meeting continues in Washington.