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US inflation in December likely to have rebounded sharply - Morgan Stanley
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Key Takeaways (30s Read)
Morgan Stanley predicts a sharp rebound in US inflation for December CPI.
Predicted Sharp Rebound in US Inflation
Morgan Stanley forecasts that the US December CPI report will show a monthly inflation rate of 0.37% and an annual rate of 2.7%. This exceeds the expected estimate of 0.3%, matching the annual inflation rate. Additionally, for core inflation, they predict 0.36% m/m and 2.8% y/y, which rises from the 0.08% average across the past two months and the 2.6% from November. Their bullish estimates are supported by later survey dates in November and higher inflation in bimonthly-sampled cities, which they estimate will add about 11 basis points to core inflation for December. Overall, Morgan Stanley expects this report to indicate a clear rebound in price pressures, potentially countering the narrative that disinflation has paused.AI Analyst
AI Opinion
"Morgan Stanley's predictions suggest that inflation in the US, which had been subdued, is on the rise again. Particularly, the expected improvement in core inflation indicates potential implications for future monetary policy. Inflation indicators are crucial for policymakers in determining whether to continue the rate hike strategy. As such, investors need to closely monitor the detailed CPI data upon its release and adjust their trading strategies accordingly. Potential risks include the possibility of market reactions should the predictions be proven incorrect, as well as an increase in volatility as a result."
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