US headline inflation tops forecasts, lifted by higher housing costs, although core inflation broadly met expectations.
11 January 2024
The US December report was ahead of forecasts of a 3.2% number, showing a 3.4% year-on-year growth rate, rising 0.3% in the month. However, core CPI year-on-year came in much in line with expectations of 3.9%.
Normally this kind of inflation “burp” would not be welcomed by markets that still, on balance, expect a rate cut in March from the Federal Reserve (Fed), but it is seemingly being taken as a case of mild indigestion in the slowing rate of inflation, rather than a full-on case of acid reflux and inflation going higher again in a second wave. But it will mean that the inflation hawks will still dominate the Fed’s narrative for the moment, especially so if PPI data on Friday is pointing in a similar shorter-term upward direction.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.