Synopsis:

Morgan Stanley expects core CPI to rise by 0.32% MoM (3.2% YoY) in February, marking a slight slowdown from January but still remaining elevated. Both core goods and services inflation are expected to decelerate, while headline CPI is projected at 0.32% MoM (2.9% YoY).

Key Points:

1️⃣ Core CPI Expected at 0.32% MoM (3.2% YoY) 📊

• Inflation moderating from January but still above target.
• Core goods and services both expected to slow.

2️⃣ Headline CPI Also at 0.32% MoM (2.9% YoY) 🏷️

• Lower impact from wildfires and seasonal adjustments compared to last month.

3️⃣ Inflation Still Sticky, But Trending Lower ⏳

• Residual seasonality effects fading, reducing upside pressures.
• Progress on disinflation remains gradual.

Conclusion:

Morgan Stanley expects February CPI to moderate but remain elevated, reinforcing the view that inflation is cooling but not fast enough for the Fed to rush into rate cuts. Markets will watch for further confirmation of disinflation in upcoming data before adjusting Fed expectations.