2023-06-13 14:30:04
Bloomberg Economics forecast:
• Core CPI inflation is expected to slow to 4.0% in the 12 months to May, from 4.9%, mainly due to large negative underlying effects, as oil prices rose last year following Russia’s invasion of Ukraine from the 12-month window. Core inflation is expected to slow from 5.5% to 5.2%.
• Inflation in some commodities, including new car prices, is likely to have slowed even as used car prices have risen.
• Inflation for some basic services may decline to its slowest monthly pace since September 2021, driven by lower inflation in rents and landlord equivalents.
High consumer price index
The previous forecast is slightly lower than the estimates of respondents to a Bloomberg survey of overseas forecasters, who expect core CPI to rise by 0.1% and core CPI to rise by 0.4%.
As there is more agreement on the broad path forward for price pressures in the US, many expect moderation in inflation rates to gain significant momentum going forward.
This is what the Federal Reserve should do
Economists at Goldman Sachs predicted in a note on Monday that core CPI inflation will accelerate on a monthly basis over the coming months as used car prices continue to decline and rental inflation slows.
Goldman’s Spencer Hill and Manuel Abecassis expect core CPI inflation to ease month-on-month to around 0.25-0.30% later in the second half of 2023.
They also expected core CPI inflation, on an annual basis, of 4.2% in December 2023 and 2.8% in December 2024.
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