The Scotiabank analysts offer a sneak peek into what to expect from Thursday’s US August Consumer Price Index (CPI) report, slated for release at 1230 GMT.
“Forecast is for headline CPI unchanged at 1.8%.
Core CPI forecast up to 2.3% y/y.
Since the Fed's preferred core PCE gauge (1.6% y/y in July) tends to undershoot core CPI fairly steadily by several tenths of a percentage point over time, the Fed's efforts to achieve the symmetrical 2% inflation target will be minimally affected.
In addition, there are measurement differences between core CPI and core PCE that don't assure that changes in one lead to changes in the other.”
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