EXECUTIVE SUMMARY
- Released Dec 13, core CPI inflation is seen broadly stabilising at a ‘softer’ 0.3% M/M in November after the surprise 0.27% in October, although analyst surveys suggest some upside risk.
- OER and rents of primary residence could see a modest renewed uptick whilst we also watch for the ongoing core goods disinflation/deflation trend and notably core services excluding shelter after particular emphasis from Chair Powell.
- Landing on day one of the two-day FOMC meeting, the report would have to be wildly different to consensus to see something other than the 50bp hike viewed as locked in for Wed but with two-way risk to the Fed rate path further out.
- Whilst a beat or miss compared to expectations might be a logistical challenge to change SEP forecasts and dots, it could however shape the language of the statement and perhaps notably Powell’s presser.
PLEASE FIND THE FULL REPORT HERE:
Three key themes to watch: core goods, shelter and core services excluding shelter:
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