SocGen economist Omair Sharif said CPI......>

US VIEW: SocGen economist Omair Sharif said CPI "keeps the Fed on track in Dec"

as when Fed Chr Yellen "indicated in her June press conference that the 12-mo

inflation rate wld be weak until March 2018, we argued that mkt participants

should keep a close eye on the 3-mo annualized core CPI rate. We felt that the

3-mo annualized core rate (and the 6-mo as well) wld be more important to

policymakers looking to hike later this yr" as "might show them whether or not

core inflation was rebounding from the weak stretch seen earlier this yr. In

that context, we think today's CPI report aids officials looking to hike."

- "The 3-mo annualized core CPI rate now stands at 2%, while the 6-mo figure is

now at 1.5%," he said. "Both metrics have come a long way since a few months

ago. Recall that the 3-mo core figure was at 0% in May (given the weak Mar

result), and the 6-mo hit its low in July at 0.9%. Looking ahead to the October

CPI report, we think that the 3-mo annualized figure will inch up to 2.1%, while

the 6-month rate will rise to 1.6%. The Fed will have that report in hand by

mid-Nov. and we suspect that these shorter-term annualized prints will boost the

arguments of officials who want to hike in December."