Bank of America Global Research made a minor adjustment to its US CPI inflation forecasts following yesterday's CPI print for the month of February.
"The February CPI report was roughly in-line with consensus expectations. Headline CPI rose by 0.4% m/m (6.0% y/y). Meanwhile, core CPI increased by 0.5% m/m (5.5% y/y) owing to elevated shelter inflation and core services ex rent and Owners' equivalent rent. Over the last three months core CPI has increased at a 5.2% annualized rate, its highest reading since October 2022 as underlying inflation remains well above the Fed's two-percent target," BofA notes.
"Incorporating the information from the report, we make minor adjustments to our CPI inflation forecasts. We revise core CPI inflation up a tenth to 3.4% y/y in 4Q 2023 and 2.4% y/y in 4Q 2024. However, we leave our forecast for headline CPI inflation unchanged at 3.2% y/y in 4Q 2023 and 2.3% y/y in 4Q 2024. We continue to expect restrictive monetary policy and a mild recession will help restore price stability in 2024," BofA adds.