US CPI due Friday - preview
Adam post a preview of the US inflation data due 11 January 2019
Following up with some bank views on what to expect:
- Gasoline prices at the pump sank about -10% sequentially in December, and much sharper than the seasonal norm. Accordingly, we look for a -0.2% drop in headline CPI on the month. Core prices should come in at a more typical 0.2% as demand remained robust - evidenced by an extremely healthy run rate in retail chain-store sales which printed north of 9% y/y at the end of December. These monthly prints would slow the y/y rate in headline CPI to 1.8% from 2.2% while leaving the core pace unchanged at 2.2%
- "While the December CPI report may not be a game changer for the market's perception of near-term hiking prospects, a solid print in line with our expectation (core CPI +0.20% month-over-month and 2.2% year-over-year) should keep Fed rate hikes in play this year if various uncertainties are resolved"
Trump has his hands full with the wall and shutdown but he'll spare a moment to urge JP not to hike any more if the need should arise.