US Sep CPI: Headline prices likely to increase 0.5% overall - Westpac

Sandeep Kanihama FXStreet Contributor

Analysts at Westpac suggest that in September, hurricane season will see gasoline run higher again and headline prices are likely to increase 0.5% overall.

Key Quotes

“Inflation has been an ongoing disappointment in the US in 2017, with core and headline CPI inflation having fallen back below the 2.0%yr medium-term target as the PCE measure remained there.”

“However in August, headline prices rose 0.4% as gasoline prices jumped over 6% and rents also experienced a strong month. Annual headline inflation lifted from 1.7%yr to 1.9%yr.”

“Come September, hurricane season will see gasoline run higher again and headline prices increase 0.5% overall. Annual inflation is therefore set to bounce back above 2.0%.”

“These inflationary influences will prove transitory, so it is best to focus on core inflation. This measure is expected to print a more modest 0.2%, 1.7%yr. Further out, expect to see headline and core inflation settle a little below the 2.0%yr medium-term target of the FOMC.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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