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Jan 10 - 12:55 AM

BofA: Anticipated Outcomes for Upcoming US CPI Report

By eFXdata  —  Jan 09 - 04:30 PM

Synopsis:

Bank of America (BofA) presents their forecast for the upcoming US Consumer Price Index (CPI) report for December, highlighting expected trends in inflation rates.

Key Insights:

  1. December CPI Forecast:

    • BofA predicts both headline and core CPI to rise by 0.3% month-on-month (m/m), with specific figures of 0.26% m/m for headline and 0.27% m/m for core CPI.
    • Energy inflation is projected to have a neutral impact (+0.2% m/m), leading to similar outcomes for both core and headline CPI.
  2. Year-on-Year Rate Changes:

    • The forecast suggests a slight increase in the year-on-year (y/y) rate for headline CPI to 3.3%, while the core CPI y/y rate may decrease by a tenth to 3.9%.
    • The headline NSA index is expected to register at 306.634.
  3. Trends in Annualized CPI Rates:

    • A minor deceleration in the three-month annualized rate of core CPI from 3.4% in November to 3.2% in December is anticipated.
    • The six-month annualized rate for core CPI could be around 3.1%.

Conclusion:

BofA's forecast for the December US CPI report indicates a continued progression towards the Federal Reserve's 2-percent inflation target. However, they note that core CPI, despite improvements, hasn't fully reached the desired threshold. The analysis suggests moderate movements in both headline and core inflation, with energy prices having a relatively neutral effect this month. These predictions, if accurate, would demonstrate ongoing but incomplete success in curbing inflation.

Source:
BofA Global Research

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