US: Upside risk to medium-term inflation outlook - Nomura
|In view of analysts at Nomura, stronger-than-expected January core CPI poses upside risk to medium-term inflation outlook of the US economy.
Key Quotes
“Core CPI inflation was surprisingly strong, rising by 0.3% (0.349%) m-o-m in January (Nomura: +0.188%, Consensus: +0.2%). The 0.349% m-o-m increase marked the highest gain since March 2005. Its 12-month change rate was unchanged at 1.8% while most in the market had expected a slight slowdown to 1.7% (Nomura: +1.682%, Consensus: +1.7%).”
“Headline CPI rose 0.5% (0.539%) m-o-m, up 2.1% (2.071%) y-o-y, also exceeding expectations (Nomura: +0.369%, Consensus: +0.3%). Certain core components, as usual, provided what appeared to be a temporary boost. Further, some technical factors such as methodological changes and potentially imperfect seasonal adjustment may have amplified acceleration in core inflation. However, the strength was very broad-based, suggesting that the underlying inflation trend might have been picking up.”
“Still we expect a gradual upward path for core inflation over the coming quarters, but today’s CPI data pose upside risks to our inflation outlook. Based on CPI data, we now forecast a 0.241% m-o-m increase (1.48% y-o-y) in core PCE inflation for January.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.