Tag Archives: inflation forecast

Virtually static in 2016, we continue to believe that core inflation will pick up only modestly in 2017.Core PCE inflation in the US settled at 1.7% y-o-y in December, in line with consensus and exactly the same rate as in February 2016. We continue to believe that PCE core inflation will pick up only modestly in 2017, ending the year at around 2.1%.Following a significant pick-up between October 2015 and February 2016 , y-o-y core PCE inflation stabilised at around 1.6%-1.7% for the...

Nonetheless, the acceleration in headline figures in December masks subdued core inflation. We believe weak core prices will mean the rise in headline inflation will soon stall.Euro area flash HICP inflation rose from 0.6% in November to 1.1% year on year (y-o-y) in December, while core inflation increased slightly to 0.9%, both above consensus expectations. The breakdown by components showed that the main driver of the increase was energy prices.In the next few months, euro area inflation...

Strange diversion of conditional inflation forecasts: At the ECB Meeting Draghi expected inflation to rebound to 1.2% next year and 1.6% in 2018.The SNB, however, predicts 2017 inflation at 0.2% and 2018 at 0.6%. YoY CPI Inflation in Germany is at 0.4%, in France 0.3%, in Italy and Spain near or under zero. Switzerland sits on a real estate bubble that sooner or later will translate into rents and prices. Rents in...