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CIBC In Line For Core CPI, Above Consensus For Headline

US OUTLOOK/OPINION

CIBC see core CPI inflation at 0.5% M/M in October, reflecting continued pressure in the shelter price index as leases reset at higher rates, lagging housing market developments.

  • High demand for other services likely added to that pressure, however, some easing in core goods prices could have been masked by the headline, as industry gauges of used car prices have fallen along with the fading of supply chain issues in that sector.
  • Core prices could also decelerate ahead if supply chain improvements and the impact of past interest rate hikes on demand start to materialize.
  • With inflation still set to remain elevated into 2023, the Fed will likely hike rates by another 100bps in order to contain inflation expectations and cool the labor market.
  • Whilst inline with consensus for core inflation, they see headline CPI at 0.7% M/M (cons 0.6%) which limits the decline in the year-ago rate to -0.2pts at 8.0% Y/Y, as relief from higher prices at the pump ended in October post-OPEC+ supply curtailments and was combined with broad price pressures in other categories.
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CIBC see core CPI inflation at 0.5% M/M in October, reflecting continued pressure in the shelter price index as leases reset at higher rates, lagging housing market developments.

  • High demand for other services likely added to that pressure, however, some easing in core goods prices could have been masked by the headline, as industry gauges of used car prices have fallen along with the fading of supply chain issues in that sector.
  • Core prices could also decelerate ahead if supply chain improvements and the impact of past interest rate hikes on demand start to materialize.
  • With inflation still set to remain elevated into 2023, the Fed will likely hike rates by another 100bps in order to contain inflation expectations and cool the labor market.
  • Whilst inline with consensus for core inflation, they see headline CPI at 0.7% M/M (cons 0.6%) which limits the decline in the year-ago rate to -0.2pts at 8.0% Y/Y, as relief from higher prices at the pump ended in October post-OPEC+ supply curtailments and was combined with broad price pressures in other categories.