The investment bank’s economists, led by Alan Detmeister, predict the annual rate of inflation, as measured by the CPI, will move to 8.5% in March. If they’re right, that would be the highest reading since December 1981, according to Federal Reserve data. 

While predictions of rising inflation aren’t uncommon these days, it may make sense to pay attention to UBS’s newly released estimates.

Over a large part of the past year, UBS’s inflation forecasts were well above consensus expectations on Wall Street. And so far, they’ve been right. Inflation data has repeatedly surprised to the upside, moving to highs many experts—including those at the Federal Reserve—simply weren’t predicting.

Now UBS is calling its shot once again, arguing inflation will peak in March and move down “sharply” from there as consumers shift their spending to services, and used car prices, which have been sky-high throughout the pandemic, begin to drop.

The UBS team also said it expects gas prices, which rose to record highs in March, will decline every month from April through November, helping to reduce headline inflation.

When it comes to core CPI, a measure that strips out volatile food and energy prices, UBS economists said to expect a 6.5% year-over-year increase in next Tuesday’s monthly inflation report, but from there, they believe a steady decline will follow as supply-chain constraints ease.

Housing price increases, which make up almost a third of the basket of measures used to create the consumer price index, will also begin to moderate moving forward, the economists said, leading to a slowdown in core inflation.

“Outsized increases in rents for new leases, which peaked last summer, continue to gradually flow into the CPI measures…and given the normal lags, suggest CPI rents should peak in the next few months,” the UBS economists wrote.

Additionally, the Fed is now set to hike interest rates as many as seven times this year, which will increase the cost of borrowing across the economy. It’s a move that typically leads to moderating consumer price increases as the overall economy begins to cool.

Still, UBS economists also included a caveat in their report, noting that their forecasts rely on a continued reduction in the effects of COVID-19 worldwide as well as falling oil prices.

“Forecasting a turning point is fraught with uncertainty, so we believe the upside risks to our forecast are notably elevated over the next few months,” the economists wrote.