Synopsis: SocGen sheds light on the forthcoming US inflation data, specifically the PPI and CPI prints. The key question being addressed is whether these figures will compel the Federal Reserve to reconsider its current monetary stance.
The Central Question: With the imminent release of the US inflation data, there is mounting speculation on the possible course of action from the Federal Reserve.
Focus on Core Inflation: SocGen emphasizes the significance of the core inflation metrics. Their analysis predicts that both core-PPI (Producer Price Index) and core-CPI (Consumer Price Index) will showcase signs of price moderation.
Headline Inflation Measures: On the broader front, the PPI is projected to exhibit a significant surge. Meanwhile, the CPI is forecasted to record a moderate 0.3% uptick.
Conclusion: While headline inflation readings may reflect upward movement, the core metrics, which are often deemed more insightful for policy actions, are anticipated to indicate a cooling in price pressures. Given this backdrop, SocGen believes the Federal Reserve can afford to retain its current monetary posture without immediate alterations.