US CPI Forecast: Banks Preview, expecting inflation to continue falling

The US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for January on Tuesday, February 14 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 12 major banks regarding the upcoming US inflation print.

The annual CPI is expected to decline to 6.2% from 6.5% in December while the Core CPI, which excludes volatile food and energy prices, is seen at 5.5% from 5.7%. On a monthly basis, the CPI is forecast at 0.5% while the Core CPI is expected at 0.4%.

ING

“We expect core inflation to rise to 0.4% MoM. A 0.4% MoM core CPI print (or possibly even 0.5%) would give the Fed near-term ammunition to argue for a May rate hike. Nonetheless, we think that shelter and cars will contribute to inflation slowing sharply from mid-second quarter, with weakening corporate pricing power also contributing to getting inflation down to 2% by year-end.”

TDS

“We forecast a firm 0.4% MoM gain in the core CPI series. In terms of the headline, we expect CPI inflation to register its firmest MoM gain since October, posting a strong 0.4% increase. Our MoM projections imply that inflation likely lost speed again on a YoY basis in January as we look for inflation to drop to 6.2% for the headline (after 6.5% YoY in December), and to ease to 5.5% YoY for the core series (after 5.7% in January).”

BofA

“We forecast headline CPI increased by 0.4% MoM in January, which would be an acceleration from the recent pace. We also expect the YoY rate to fall from 6.5% to 6.1%. Meanwhile, we look for core CPI to increase by 0.3% MoM and for the YoY rate to fall from 5.7% to 5.4%.”

Deutsche Bank

“Higher gas prices should boost headline MoM CPI (+0.42% DB forecast). Core MoM should be stable (DB +0.36%). The YoY rates should fall around two-tenths each to 6.2% and 5.5%, respectively.”

RBC Economics

“We expect CPI growth edged down to 6.2% in January from 6.5% in December (YoY). Food price growth likely also continued to slow, albeit from very high levels. By contrast, we expect energy price growth to tick up for the first time in 7 months – though to an 8% rate that is still well below a June peak of 42%. We look for core inflation to slow further in January, coming in at 5.4% YoY, down from 5.7% in December. All told, recent inflation reports have pointed to a relatively broadly-based easing in price pressures.”

NBF

“The energy component likely rebounded in the month, helping the headline index to advance 0.5%. If we’re right, the YoY rate should come down from 6.5% to 6.2%. The core index, meanwhile, may have continued to be supported by rising rent prices and advanced 0.3% on a monthly basis. This would translate into a three-tick decline of the 12-month rate to 5.4%.”

CIBC

“There’s still scope for a deceleration in the core component in January to a 0.3% monthly pace, however, as wage growth decelerated, and shelter prices are set to decelerate imminently, in line with the typical lags associated with new leases that are resetting at lower rates. That could provide an offset to any slowdown in the pace of disinflation in goods prices, as industry measures of used car prices climbed in January. When adding gasoline and food prices back into the mix, total prices likely increased by a stronger 0.5% on the month. We’re below the consensus on core CPI, which could slightly weigh on bond yields and the USD.”

Citibank

“US January CPI MoM – Citi: 0.5%, prior: -0.1%; CPI YoY – Citi: 6.3%, prior: 6.5%; CPI ex Food, Energy MoM – Citi: 0.4%, prior: 0.3%; CPI ex Food, Energy YoY – Citi: 5.6%, prior: 5.7%. After three months of an apparent slowing in core CPI increases from October through December, we expect CPI to pick back up to a 0.4-0.5% pace with a 0.43% MoM rise in January core CPI. However, an eventual moderation in shelter prices should help moderate core CPI by mid-year.”

Wells Fargo

“We expect to see a 0.4% MoM increase in the CPI. Rising gasoline prices and a pause in the downward trend of used car prices are part of the reason we believe that January will see faster price growth compared to December. That said, the underlying pace of inflation still appears to be gradually slowing, and we expect the year-ago inflation rate to register another decline. We look for YoY CPI inflation to be 6.2% in January. If realized, this would be the slowest pace of CPI inflation since October 2021.”

Commerzbank

“We expect consumer prices to rise by 0.4% from December, and by 0.3% excluding energy and food (core rate). The respective YoY rates would then fall from 6.5% to 6.2% and from 5.7% to 5.4% (core rate).”

ANZ

“We expect US core CPI to have risen by 0.3% MoM in January, while higher energy prices should see headline CPI inflation up by 0.5%. Fed guidance is likely to remain hawkish until it gets a clearer picture that core services excluding housing inflation and tightness in the labour market are beginning to moderate. On a YoY basis, we expect January core CPI would result in core easing to 5.4% from 5.7% and headline to 6.2% from 6.5%.”

Danske Bank

“We forecast core CPI at 0.4% MoM. An upside surprise to 0.5% or above would in our view mark a clear upturn in the broader underlying inflation pressures and could take EUR/USD another leg lower.” 

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About the Consumer Price Index

The Bureau of Labor Statistics publishes the Consumer Price Index, which is a calculation of the average price of a selection of goods and services. An increase in the CPI suggests a decrease in consumers' purchasing power. The CPI is considered the most important measurement of inflation trends. Typically, when the CPI is higher than expected, it strengthens the value of the US Dollar compared to other currencies, but a lower-than-expected reading can cause the US Dollar to weaken.