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Morgan Stanley sees US CPI confirming persistent inflation pressures
Key Takeaways (30s Read)
Morgan Stanley highlights persistent inflation pressures confirmed by upcoming CPI data.
Morgan Stanley anticipates that the U.S. Consumer Price Index (CPI), set to be released on December 18, will confirm persistent inflation pressures. They predict that core CPI will reach around 3.0% year-on-year due to rising shelter costs and ongoing strength in goods prices. Despite data limitations because of the government shutdown preventing monthly prints, the broader signals still suggest significant underlying inflation momentum. This data is likely to maintain the Federal Reserve's cautious stance on policy easing into early 2026, as it remains inconsistent with the Fed's 2% inflation target.
AI Analyst
AI Opinion
"Morgan Stanley's analysis indicates that the forthcoming CPI data is likely to reinforce persistent inflation pressures, urging the Federal Reserve to adopt a cautious approach towards monetary policy. This sentiment could lessen expectations of immediate rate cuts, potentially strengthening the U.S. dollar. Additionally, fluctuations in the housing market and ongoing resilience in goods prices may impact consumer purchasing power. Given the limitations in data transparency, investors need to exercise caution in their market reactions. Should inflation persist beyond expectations, the Fed may find it necessary to maintain restrictive policies for a longer duration."
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